- Germany-based Deutsche Bank announced on July 7 it would lay off 18,000 employees worldwide amid a massive restructuring effort.
- The layoffs will likely hit London and New York hardest, as the cities house the stock and bond trading units getting the axe, according to the New York Times.
- While laid-off employees in the US typically pack up and leave immediately, Europe gives workers a few weeks to finish up projects and start their job search.
- Visit Business Insider’s homepage for more stories.
Deutsche Bank’s London office reportedly laid off employees at a morning meeting around 8 a.m on July 8. The staff had until 11 a.m. to leave the office, after which their badges would no longer work.
The bank announced on July 7 that it would lay off 18,000 employees in offices worldwide as part of a massive restructuring effort.
US companies typically give laid-off employees just hours to pack up. For example, workers at Tesla – which laid off 7% of its employees in 2019 – told Business Insider that the process took just just five minutes.
Read more: The startup founder’s guide to letting people go efficiently and compassionately
Yet in Germany, where the bank is headquartered, laid-off employees likely had different mornings. Layoffs in Europe differ from those in the US, partly due to the worker-centric policies in the EU, as well as cultural differences.
"In the US, when we fire somebody you call them into your HR or manager's office, the manager says it's time to go, and they pack their backs and leave," Erin Meyer, a professor at global business school INSEAD who has studied how cultural differences impact businesses, told Business Insider. "That is not at all how people are fired in Germany or in Europe."
Ripping off a Band-Aid versus cooking a lobster
Germany typically lets laid-off employees stick around for weeks following a firing. Workers finish up projects and even start job hunting while still at their old posts, Meyer said.
She attributes the difference to both Germany's relationship-based culture and the country's worker-friendly policies. German employees typically develop close relationships to their coworkers, making severing ties more personal for the employer, Meyer says. The country also has progressive federal employment laws, including mandatory vacation time and generous paid parental leave.
"Firing in the US is like pulling off a Band-Aid," Meyer said. "You have a problem, you pull out the Band-Aid, it hurts a lot, and the problem's gone."
She added: "In Europe, it's more like boiling a lobster: you put the lobster in, slowly the lobster cooks, and finally the time is done"
While Meyer couldn't say which style was better, leading CEOs and HR experts told Business Insider's Shana Lebowitz that letting people go with compassion helps maintain the company's reputation.
What this means for Deutsche Bank's global workforce
Deutsche Bank hadn't specified where most layoffs would occur, but the stock and bond trading units getting downsized are primarily in New York and London. (Business Insider has reached out to Deutsche Bank for comment.)
The bank has struggled to remain competitive with US investment banks Goldman Sachs and JPMorgan Chase. Federal authorities are also investigating whether Deutsche Bank failed to properly comply with anti-money-laundering regulations, according to the New York Times.
While laid-off employees at Deutsche Bank's UK office only had a few hours to leave, Meyer said the country's layoffs are typically more generous.
"In the UK, it is not like the US, where when you fire somebody, you pack up their boxes and march them out the door," she said.
Hong Kong will also see layoffs, as Deutsche Bank has said it will cut entire teams in the Asia-Pacific region. Hong Kong also has a less impersonal layoff process, according to the South China Morning Post, which likened layoffs for some executives to a "long paid holiday." Laid off workers get more severance if they were at the company for a number of years, and can even ask employers for free medical coverage.