Report: Deutsche Bank to Cut 1,000 Jobs

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Deutsche Bank aims to cut almost a tenth of its investment banking staff, the latest lender to respond to a slowdown in financial market activity as the euro zone crisis saps client confidence, sources familiar with the plans said.

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The cull of around 1,000 jobs is an about-turn for Germany's flagship lender which in April said it saw no need for layoffs at its investment bank, one of the main profit drivers for the whole company.

A slowdown in stocks and bonds trading and fewer company takeovers in the three months to June has forced global investment banks including Credit Suisse <CSGN.VX>, Goldman Sachs <GS.N> and UBS <UBSN.VX> to slash staff.

Analysts and consultants predict that banks will cut more jobs this year - perhaps another 5 percent of their workforces - due to weak profits, even after thousands of layoffs in 2011.

Deutsche Bank's investment bank job losses will come in addition to a cost-cutting program announced in October, when the bank said it would axe around 500 positions in corporate banking and securities due to a "significant and unabated slowdown in client activity."

At the end of the first quarter, the company employed 10,258 staff at its corporate banking and securities arm, which includes sales and trading as well as the mergers and acquisitions division.

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Deutsche is expected to announce the latest job cuts at the end of July, when it reports second-quarter earnings. The cuts will fall mainly outside Germany, one of the sources said on Thursday.

They are a reaction to a slowdown in capital markets activity and are not part of a strategy update which co-chiefs Anshu Jain and Juergen Fitschen plan to unveil in September, one of the sources said.

The outlook for investment banking remains bleak.

A J.P. Morgan report in late May forecast a slowdown in trading of fixed-income currency and commodities of up to 32 percent quarter-on-quarter.

Equities trading was expected to fall 14 percent, and credit trading was seen dropping by 35 percent quarter-on-quarter, the report said.

Deutsche Bank declined to comment.