Hundreds of City workers are fearing for their jobs after Deutsche Bank, the global bank that is one of the Square Mile’s largest employers, said it plans to axe 18,000 staff worldwide in the latest attempt to revitalise its reputation and business.

The layoffs, equivalent to 20% of the bank’s workforce, come after chief executive Christian Sewing flagged an extensive restructuring in May, when he promised shareholders “tough cutbacks” to the investment bank and that he would push ahead with a further €1bn (£880m) in cuts this year.

The pledge came after similar moves in 2018 that led to 6,000 job losses, and a failure to agree a merger with rival Commerzbank.

Deutsche Bank, which has recently come under scrutiny over its business relationship with Donald Trump, would not reveal how many staff in its UK operations would be put out of work in the latest round of redundancies, although the numbers are expected to be significant, as London – where the bank is in the process of constructing a new headquarters – is one of of the lender’s largest bases, with around 8,000 staff.

Sewing, who has been in the job for just over a year, said: “We are tackling what is necessary to unleash our full potential … We are building on our strengths. This is a restart for Deutsche Bank.”

Paul Achleitner, chairman of Deutsche’s supervisory board, said: “Deutsche Bank has been through a difficult period over the past decade, but with this new strategy in place, we now have every reason to look forward with confidence and optimism.”

Deutsche Bank has suffered multiple blows to its reputation over the past year, having failed US bank stress tests, suffered downgrades to its investment grade ratings, and had its offices raided by German police in November as part of a money-laundering investigation linked to the Panama Papers revelations.

Following the raid, the bank said that it had “no concrete evidence that would support the allegations against us or any of our employees”.

The bank has also paid billions in fines and settlements relating to behaviour before and after the global financial crisis, including a $7.2bn settlement in 2017 with the US Justice Department over the sale of bonds based on mortgages to people with unreliable credit.

As a lender to Trump, despite a series of corporate bankruptcies and defaults starting in the early 1990s, Deutsche Bank has been subpoenaed by two congressional committees for documents as part of investigations into the US president and his company. Trump sued Deutsche Bank to stop the subpoenas, but a judge ruled in May against the president.

The latest plan to relaunch the bank involves closing its equities sales and trading arm, which is essentially a giant stockbroking operation that buys and sells publicly listed shares on behalf of large hedge funds or asset managers. Most of the staff employed in that division are based in London, New York and Hong Kong.

Deutsche Bank said it would also “resize” its fixed-income operations – which principally involve government and corporate bonds – and create a bad bank in which to place and offload its unwanted assets.

To make the cuts, the lender is expecting costs of around €7.4bn by the end of 2022, which will include €3bn in the second quarter of 2019.

The Frankfurt-based bank expects a €2.8bn net loss in the second quarter as a result of the restructuring charges.