Bloomberg reported that after years of scandals and lackluster performance by Deutsche Bank, CEO Christian Sewing’s plan to shrink U.S. operations to cut costs is reaching territory we haven’t seen before.
From its original Wall Street location, Deutsche Bank moved its headquarters to Midtown, reducing its footprint in the city by 30 percent. From there, employees were nearshored, or sent to places in the U.S. to get paid less while saving costs on housing and office prices, to Jacksonville, FL. There was also a plan back in July to cut dozens of jobs in Chicago.
Out of all of the employees who were nearshored to Jacksonville, 60 of those accounting positions are being offshored to a much cheaper place: Mumbai, India. The relocation efforts may save them some cash, but it comes at the expense of hiring and training good, valuable employees. The trouble with relocating all of their talent to other places is that the company will be left with no candidates to hire. The employees will leave instead of moving their families to India, job postings will remain online forever and Deutsche Bank will save a lot of money in the short term, while ignoring a long-term cost that is tough to gauge.
But for a company that has struggled with many key-banking functions, it could lead to disastrous implications like an overwhelming brain drain of talent. Hiring younger employees to take over these positions for lower costs could lead to even more scandals in the future. Nearshoring efforts are not always done with nefarious intentions because some companies seriously need to save money. But offshoring employees to India from a place that is already saving the company funds is a bit suspicious. Ultimately, Deutsche Bank’s plan is to cut costs at the expense of employees.