Deutsche Bank sells IT unit for symbolic €1 in job-cutting drive
Indian multinational Tata Consultancy Services will take on 1,500 Postbank Systems workers in Germany
Frankfurt/Bengaluru — Deutsche Bank has agreed to sell a technology services unit to Tata Consultancy Services (TCS), helping the bank move closer to CEO Christian Sewing’s ambitious job-cutting target.
The two companies aim to finalise the sale of Postbank Systems by the end of the year, according to a statement from Deutsche Bank on Monday that confirmed a Bloomberg News report last month. The bank will take a hit of about €120m, it said.
While the price tag on the deal is a symbolic €1, Deutsche Bank can save on future redundancy costs while offering long-term job prospects for PB Systems staff, a person briefed on the matter said. The lender will continue to pay for PB Systems’s services similar to the intercompany agreements now in place, the person said.
TCS, the biggest software exporter by market value, will take over PB Systems’s 1,500 employees in Germany in the deal. Sewing last year unveiled a restructuring plan centred on cutting 18,000 jobs, with about half of those expected in Germany, Bloomberg News has reported.
Germany’s largest lender recently dissolved the formerly separate subsidiary Postbank and it is now trying to wring hundreds of millions of euros in cost savings by eliminating duplication. As part of that effort, it is merging Postbank’s formerly separate IT operations with those of the parent company, which will ultimately render the services provided by PB Systems redundant for the bank.
TCS, with more than 450,000 employees across the world and $22bn in annual revenue, in 2008 paid $505m to acquire Citigroup’s back-office unit in what was then its biggest acquisition. It says it provides services to more than 100 German companies.
“It’s a very important deal that solidifies our position in Germany, already one of our fastest-growing markets,” TCS COO NG Subramaniam said via video. “We can leverage the banking skill sets of Postbank employees to push for further growth; we are already seeing multiple opportunities in our conversations with a number of small and medium German banks.”
Sewing’s job-cutting effort recently hit a roadblock after the coronavirus outbreak led to a short moratorium on dismissals earlier this year and the pandemic made employees less willing to change jobs.
Would you like to comment on this article or view other readers' comments?
Register (it’s quick and free) or sign in now.
Please read our Comment Policy before commenting.