Skip to main content

Commerzbank -- cuts dividends and 20% headcount reduction

Well its official


Monday speaking to some friends at Commerzbank it was clear that something was in the air!  No one knew what but senior staff was busy and unavailable for the past few weeks.  Now we know, dividends are out of the door this year (very very serious) and 20% of the staff will be let go -- blaming automation, but in reality what we are seeing is a cut back to the profitable business only. The bank did the same thing in the early '00; They looked at shutting down business and cut a lot of  "fat". Of course, the problem is that today's star can become tomorrow's dog, but that is of no concern to management.  Stop the bleeding is the first order of business!  In reality is that from the mount of the gods (e.g. the CEO's office) came down an edict: "Cut 20% of the workforce".

The impact is always the same:  going down the various levels the bosses decide what team to keep and what team to let go; its easier to get rid of entire teams -- its better for the overall moral, than cutting 20% of each team -- which creates paranoia (justified by the way).

The second round (because that's never enough to meet the 20% target) is get rid of people that have a "bad performance" followed by those who don't get a long, and then cut more because you have to cut numbers by 20%.  I've seen situations where a country team was let go and where the boss remained...

Independently of how painful the firing process is, the real issue here is the decision to cut the dividend -- bank stocks are considered blue chip income stocks, with a lot of pensioners counting on their dividends as income, it shows how serious the situation is as the bank now takes an aggressive stance on fixing its balance sheet.

Yesterday's words from Credit Swiss' CEO sound as powerful indication of things to come


No position on CS or Commerzbank


Comments

Popular posts from this blog

Spray painting Taylor Swift G650 aircraft (updated)

 First, a bit of paint will not harm anyone.  These climate activities are going to learn two things in the next few days:  (1) Trespassing at an airport is a felony almost anywhere in the world.  That means criminal prosecution.   (2) removing paint from an aircraft is expensive.   So these climate activists are about to find out the reach of the British criminal system and it will not be pleasant, the UK has very strict laws about that, I would be surprised if cleaning the aircraft of all the paint will cost less than $100,000.     I am sure that when they planned (premeditation) this little show they had a very valid logic to doing this.  Tonight, they are probably realizing the depth of their troubles.   I understand that in the UK it's a minimum one-year jail sentence.    Also, good luck travelling with a criminal trespass charge against you.  I am relatively certain that the airline industry will ...

Janet Yellen from China supporter to Hawk...

There is rarely serious news in the world these days, it seems that most newspapers are filled with headlines and little else, and then Ms Yellen went to China.  Secretary Yellen has long been known in the Biden administration as the voice of moderation when dealing with China, yet as her trip which concluded yesterday a hawk was born:  She warned the Chinese against dumping goods in the United States.    fighting words! The American administration is very concerned about the lack of Chinese domestic consumption.   Even before the COVID-19 epidemic, there were already the beginning signs of a slowdown, automobile sales were off.   China is facing domestic deflation (a clear sign of collapsing demand) China imports few consumer goods, they import raw materials and intermediary goods.   It seems that the American administration is concerned that the Chinese administration will dump consumer goods abroad to keep its manufacturing machinery ...

Farm; Half year performance

 People appear to be genuinely curious. 2024 has been a record first half for the farm.  The addition of high tunnels has greatly impacted our revenues.   While we expected Q1 profits to be higher, it really was the second quarter that produced the goods.  The terrible weather has greatly impacted the production of high-end vegetables. Energy costs are now very stable and have become a fixed variable especially now that our bio digesters are fully dialled in.   Replacing some of our pre-dryer equipment was covered under warranty, and the new equipment is far better at dealing with gas moisture, and much better steel!   Our diesel costs are what they are! Our biologist and ecologist devised a new planting plan for our high tunnels that greatly reduced pests, especially slugs.   We have seen a 90% decline in sluggs this year, resulting in better yields.   It seems that several plants act as natural repelants and if planted c...