The headquarters of Commerzbank stands on March 19, 2020 in Frankfurt, Germany.
Commerzbank Chief Executive Manfred Knof has struck a deal with employees over a job reduction plan, paving the way for the German bank to cut 10,000 jobs globally.
The agreement, announced by the bank and union officials on Friday, is central to Knof’s effort to streamline the country’s second-biggest listed lender and return it to profitability.
“Today, we have taken a major step towards achieving our sustainable cost targets – and towards our goal of making Commerzbank sustainably profitable,” the CEO told Reuters.
Commerzbank hopes the revamp will revive its fortunes as a standalone bank as it tries to turn a new leaf after management reshuffles and strategy flip-flops. It has never fully recovered after a state bailout during the last financial crisis more than a decade ago and lost 2.9 billion euros in 2020.
Weeks after becoming Commerzbank CEO at the start of the year, Knof announced plans to cut 10,000 jobs and close hundreds of branches in a 1.8 billion euro ($2.2 billion) restructuring. The bank on Friday said that the restructuring bill would be higher than initially envisaged at slightly more than 2 billion euros.
Knof told employees in January that cuts were a necessary “bitter pill”, and over recent months, management has negotiated the reductions with labor representatives, hoping to clinch a deal before the bank’s annual shareholder meeting in May.
The job agreement includes early retirement and reduced hours for older employees. It also includes severance packages and retraining programs.
Christoph Schmitz, an official with the Verdi union, said the agreement would effectively prevent forced redundancies and slow departures so that the remaining workforce was not overburdened.
Knof, who trained as a lawyer, spent the bulk of his career at insurance group Allianz before a 2019 move to Deutsche Bank, where he was head of retail operations in Germany. He joined Commerzbank at the start of 2021.
Commerzbank and Deutsche Bank abandoned talks to merge in 2019, but speculation about possible M&A activity has not gone away.
“My goal is to ensure Commerzbank’s independence as a profitable, high-performing bank,” Knof told Reuters.