Commerzbank has warned that more jobs may be on the line after agreeing a settlement with labour unions over previously announced plans to axe 10,000 full-time positions by 2024.
First announced in January last year, the cuts will lead to the loss of 10,000 jobs and the closure of 340 branches. The bank, which employs nearly 50,000 people worldwide, says that one out of every three jobs in its home market of Germany will go while its branch network of 790 will be reduced to 450.
Following talks with union representatives, the bank intends to implement the headcount reduction primarily through retirement arrangements, such as partial retirement or early retirement. As part of this aagreement, the bank has extended the offer of early retirement to seven years, an olive leaf that will add €250 million to a two billion euros restructuring bill
The bank will book provisions for additional restructuring expenses of around 225 million euros for retirement arrangements that were expanded beyond the scope of the original plan.
“This money is well invested as it enhances our planning certainty for the implementation of the headcount reduction,” comments Manfred Knof, chairman of the Board of Managing Directors of Commerzbank. “We engaged in some very intensive negotiations and have achieved a result that will enable the fast implementation of the transformation.”
Knof says the will assess the outcome of the new labour deal in 2023. If it emerges that the measures have proved inadequate, the bank will consult with unions on collective reductions in working hours or compulsory redundancies as a last resort.