Commerzbank has agreed with the works council on extensive cuts in the workforce. That costs the group 610 million euros. Customers will also have to adapt.
Commerzbank is cutting 2,300 jobs for its corporate restructuring and has to cope with millions to do so. For the planned job cuts, the bank wants to book provisions of 610 million euros in the final quarter, the bank announced on Monday in Frankfurt. The move will have a correspondingly heavy impact on earnings in the fourth quarter. “In this way we create the basis for urgently necessary future savings,” explained CFO Bettina Orlopp.
Commerzbank, which is under pressure due to the low interest rates and digitization, has agreed with the group works council on these restructuring measures for the years 2021 to 2024.
But that’s not all: The bank is also planning further steps as part of its new Commerzbank 5.0 strategy, which is to be announced in the first quarter of the new year. Details have to be worked out and decided, said the financial institution, which has around 39,000 full-time positions.
Commerzbank is likely to close many branches
At Commerzbank, the largest shareholder of which has been the German state since it was rescued with tax billions in the 2009 financial crisis, discussions have been going on for months about additional savings. In view of advancing digitization, drastic cuts in the branch network and further job cuts are expected.
The bank had already announced in September 2019 that it would cut 4,300 gross full-time positions. But investors didn’t go far enough. The outgoing CEO Martin Zielke had announced his retirement after harsh criticism, and his successor will be the previous Deutsche Bank manager Manfred Knof on January 1, 2021.
Commerzbank had already expected a loss
Branch closings and a partial retirement offer for employees had already led to expenses of 201 million euros in the third quarter. As a result, as well as the new provisions, the job cuts add up to 2,900 full-time jobs, as it was said.
Due to the ongoing restructuring of the group, Commerzbank had made a loss of 162 million euros in the first nine months of the year – after 681 million euros in profit in the same period of the previous year. For the current year, the management board is anticipating a loss anyway, which is now likely to be even higher.