Feel like you’ve been scrooged? DK redundancies
Is it really likely that DK will now be able to persuade better-quality individuals to join the firm? It might be struggling to retain the ones that are left.
Dresdner’s unseasonal redundancies could have long-term repercussions.
Investment banking is a tough business. So few tears will be shed for any banker that is made redundant – even if it is just before Christmas.
But both employers and employees make an unwritten pact on performance, contribution and pay. So being fired just ahead of expected bonuses during a record earnings year for the industry as a whole must be a bitter pill to swallow for those recently let go from Dresdner Kleinwort.
Like many firms, DK will have enjoyed bigger revenues in 2006 than in 2005 but for many years it has under-performed the market. Its global bulge-bracket aspirations, which reached their height with the over-ambitious purchase of Wasserstein, are long gone. It is amazing to think that Dresdner and Deutsche were once neck and neck and that a merger of equals was a possibility. Deutsche has joined the bulge bracket but DK has suffered from under-investment and poor management, leading to wave after wave of senior defections and poor results. Now the best that CEO Stefan Jentzsch can hope for is major regional player status. Even that looks optimistic at present.
Jentzsch has come in with a brief to bring DK back to the homeland.