FRANKFURT (Reuters) – Deutsche Bank is for the first time considering asking its German staff to cut their hours and take government money instead as it tries to navigate the coronavirus crisis.
After years of losses, Germany’s biggest bank has been trying to engineer an overhaul that includes pulling back from some of its international operations, but its recovery plan and share price have been hit hard by the pandemic.
Short-time work is a form of state aid that allows employers to switch employees to shorter working hours during an economic downturn to keep them on the payroll. It has been widely used by industry, including Germany’s car sector, but not by banks.
Germany recently expanded its short-time work program to ease the burden on firms during the coronavirus crisis and Deutsche Bank is just one of several banks studying its options.
If Deutsche Bank employs the scheme it would be likely to largely affect those of its staff who work in branches that are temporarily closed, perhaps only several hundred of the bank’s 40,000-strong workforce in Germany, sources told Reuters.
By contrast, the nation’s carmakers are using the scheme to cover the costs of hundreds of thousands of its workers.
Deutsche said it was not at present using short-time work but it was “examining whether and where it might be useful”.
“At the operational level, the bank is preparing for such scenarios,” the bank said.
Such measures could also meet some union resistance.
The Verdi trade union voiced scepticism about invoking the measure, which could mean employees earn less, because banks could face even more work in some areas.
This could include processing a surge in loan applications from companies seeking funds amid the crisis, Jan Duscheck, head of Verdi’s banking division, said.
Banks around Europe have been scrambling to respond to a flood of requests for loans and relief from businesses to keep the region’s economy afloat during the pandemic.
“There are already collective agreements and numerous company regulations in place to manage fluctuations in work volume and safeguard employment,” Duscheck said.
Nevertheless in Germany, some banks, mainly the country’s cooperative lenders, have already applied for short-time work, Stephan Szukalski, head of banking union DBV, said.
“Short-time work is something completely new and unknown to banks,” Szukalski said.
(Reporting by Patricia Uhlig, Hans Seidenstuecker, and Tom Sims; Editing by Michelle Martin and Alexander Smith)