The timing couldn't have been worse.

Just on the heels of a report released earlier this month that more than five million people in Germany are unemployed -- a level not seen since 1933 -- Deutsche Bank announced it plans to slash 6,400 jobs worldwide, including 1,940 in Germany.

To rub salt in an already deep wound, the cuts at Germany's biggest bank come after the bank ran up profits of €2.5 billion ($3.2 billion) in 2004, the highest in four years.

The connection between cutting jobs while the company is flush with cash hit many Germans -- saddled by an economy skating just a few tenth of a percentage point above recession and unemployment rates surpassing 20 percent in some areas -- where it hurts and the outrage was heard loud and clear, from people on the street and politicians on both sides of the political spectrum.

In a newspaper interview, Chancellor Gerhard Schröder criticized the Deutsche Bank policy that led to the decision to lay off workers. The staff cuts will help the bank attain a 25 percent return on equity and boost its market capitalization, allowing it in essence to join the ranks of the globe's leading financial institutions. Deutsche Bank is currently ranked only 23 in international comparisons of large banks.

The chancellor encouraged the bank to take as a model one of the bank's earlier heads, Alfred Herrhausen, who he said put the interests of Deutsche Bank employees and its home country on an equal footing with those of shareholders.

The conservatives didn't like the layoff announcement any better. Edmund Stoiber, premier of Bavaria and head of the Christian Social Union, called Deutsche Bank's actions "tasteless, inept (and) unacceptable."

Calls for action

Jürgen Peters, the head of the IG Metall union, accused Deutsche Bank's management of callousness and called on the government to tighten rules governing corporate layoffs. "Profit maximization at the expense of the public is a betrayal of our society. Such companies should be ostracized," he told the mass-circulation newspaper Bild.

Several politicians called on Deutsche Bank's clients to consider taking their business elsewhere, for example, to Germany's state-owned savings banks, or Sparkassen. Andrea Ypsilanti, head of the Social Democrats (SPD) in the state of Hesse, where Germany's financial center Frankfurt and Deutsche Bank's headquarters are located, led the calls for a boycott of the bank, saying it was playing a "cynical game" with German society.

"It's a development that we've seen in the past few years of companies, not just Deutsche Bank, putting profit targets ahead of questions of corporate responsibility," said Gert-Uwe Mende, spokesman for the SPD in Hesse. "Germany's Basic Law stipulates that property brings with it obligations and there is a certain social duty associated with assets that we firmly believe in."

In good company

Many say that duty is being neglected in times of globalization and while Deutsche Bank's job cuts received the brunt of the outrage, the bankers are not alone in their strategy of cutting personnel costs even though their numbers are firmly in the black.

Insurance giant Allianz saw its profits triple in 2004, but cut staff by 17 percent. Pharmaceuticals concern Schering reported its earnings jumped by 13 percent in 2004 but plans to cut 2,000 jobs. Engineering giant Siemens watched its bottom line improve last year but has said its communications division will be the target of drastic cuts this year.

Joseph Ackermann, Deutsche Bank's CEO, has firmly defended his restructuring plans, saying they are a necessary measure to ensure the company's competitiveness. He has found supporters among many economists and business leaders.

"When companies are active globally, they can't always keep the local sites and personnel at whatever the cost," said Thomas Hühe, a spokesman for the Federation of German Industry. He said managers have to take a hard look at the economic realities and sometimes make equally hard decisions.

"It would be nice to keep local workforce going if conditions allow it. But it's not always possible," he said.

What kind of social responsibility do corporations have? Read more on the next page

The issue of a corporation's responsibility toward its home country will likely play larger in the future, as the realities of globalization mean companies will increasingly move jobs abroad to low-wage countries like India or China, leaving more and more people at home without work.

The process has already begun and is likely to accelerate, according to Adrian Ottnard, a senior economist at the Bonn-based IWG institute, which studies issues relating to the economy and society.

"That is really the core of the matter," he said. "This matter with Deutsche Bank is only a harbinger of what's to come."

While small and medium-sized companies often exhibit more of a connection and, some would say, faithfulness to their home country, globalization has changed the way large multi-nationals operate. Corporate priorities, many coming initially from the United States, such as maximizing shareholder value and rates of return, have established themselves as the norm not only in Germany, but globally.

"Stock prices are looked at very carefully as are quarterly earnings reports and then action is taken quickly," he said. "That is not always good for a company in the long term nor is it seen by the public as good for the society. The corporate criticism is partly justified."

Broad-based discussion needed

According to critics of this kind of corporate behavior, Germany is in need of a serious discussion about the role corporations should play in society and what their duties are toward the country that gave them their start, not to mention their initial customers.

According to Gert-Uwe Mende of the SPD in Hesse, Germany as a whole -- politicians, industry leaders, union heads, and employers -- has to talk about ethical guidelines, rules which he said many companies do follow, but that large multinationals increasingly think they can ignore.

He doesn't argue with the fact that profit is the ultimate goal of a corporation, nor that the era of globalization and tougher international competition have created a new set of challenges for global players, who are faced with new problems that call for new solutions.

"But perhaps those solutions are more complicated, and slightly different, than the fairly simple ones that corporations have given us so far," he said.