Rival investment bankers who have been rubbing their hands in anticipation of being able to pick off key staff say that "hundreds" of junior and middle ranking staff in both London and New York have already gone.
Bankers say the "golden handcuffs" worth $400m put in place in March to hold on to key employees are not having the desired effect. Middle ranking staff complain that most of it was snaffled by those at the very top, such as BT chief executive Frank Newman and vice-chairmen Mayo Shattuck and Yves de Balmain, leaving a pittance for those lower down. Half the amount - $202m - is going to just the top six. So peeved are more junior staff that they have run up T-shirts with the caption: "Frank Newman got $55m and all I got was a lousy T-shirt."
It is understood that a number of key staff in the US, including the heads of Treasury and global fixed income, have yet to agree terms to stay.
"The bank is just melting away," said one banker who was due to see several BT employees about joining his firm. "The handcuffs have been hogged by those at the top. No one wants to work for Deutsche Bank."
The bank is also due next month to pay out some of the annual bonuses agreed at the end of last year but held back to prevent staff leaving.
High profile defections at BT in recent months include Alex Graham, the London-based head of European equity markets who was poached by Donaldson, Lufkin Jenrette; Matthew Collins, head of European Debt Capital markets who is going to Merrill Lynch; and Bruce Brandaleone, head of global equity sales and trading.
Josef Ackermann, head of Deutsche Bank's existing investment banking operation, admitted last week that some banks were offering staff "tremendous" amounts of money and acknowledged that this was causing him concern.
Although the equity advisory business is not seen by competitors as a threat, BT was known for its expertise in leveraged finance, which is seen by big global players such as Goldman Sachs and Merrill Lynch as an increasingly powerful weapon in winning Initial Public Offering (IPO) business. Rivals say that is now at risk.
Deutsche, whose casualties so far since the takeover was announced have been relatively modest, said at the outset that it wanted to cut staff by 5,500, mostly in London and New York. The Bankers Trust name is to disappear, although the bank is planning to retain Alex.Brown.
The highest profile departure is the telecoms team led by James Golob and Bill Harrison.