© Reuters. FILE PHOTO: A Commerzbank logo is pictured ahead of the bank’s annual press conference in Frankfurt on February 9, 2017. REUTERS / Ralph Orlowski
The employee representatives of FRANKFURT (Reuters) -Commerzbank agreed on job cuts on Friday, announced the bank and union representatives and paved the way for the German lender to cut 10,000 jobs worldwide.
The deal is central to Chief Executive Manfred Knof’s plans to streamline the country’s second largest publicly traded lender and make it viable again.
The deal includes early retirement and reduced working hours for older employees. It also includes severance packages and employee retraining programs.
Weeks after taking office as CEO of Commerzbank (DE :), Knof announced plans to cut 10,000 jobs and close hundreds of branches as part of a € 1.8 billion ($ 2.2 billion) restructuring. The bank said on Friday that the restructuring bill would be a little more than € 2 billion higher than originally planned.
For the past few months, management has been negotiating the cuts with employee representatives in hopes of closing a deal ahead of the bank’s annual general meeting this month.
Commerzbank hopes the overhaul will revive its destiny as it struggles to restore profits after a management reshuffle and strategy flip-flops. It never fully recovered more than a decade ago following a government bailout during the last financial crisis, losing 2.9 billion euros in 2020.
Knof told staff in January that cuts were a necessary “bitter pill”.
Christoph Schmitz, a Verdi official, said the deal would effectively prevent forced layoffs and slow departures so that the remaining workforce would not be overloaded.
Knof, who was trained as a lawyer, spent most of his career at insurance giant Allianz (DE 🙂 before moving to 2019 Deutsche Bank (DE :), where he was head of retail in Germany. He joined Commerzbank in early 2021.
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