Commerzbank to Cut 3,900 Jobs Amid Transformation Efforts

Commerzbank has announced plans to reduce its workforce by 3,900 positions as part of a comprehensive restructuring strategy aimed at enhancing its operational efficiency and competitiveness. The bank emphasizes that it intends to manage this transition in a socially responsible manner, primarily leveraging demographic changes and natural employee turnover.

To facilitate this process, the bank has reached preliminary agreements with employee representatives to launch a partial retirement program, which is expected to be implemented within the current year. This initiative aligns with Commerzbank's commitment to mitigating the impact of job cuts while addressing the evolving needs of its workforce.

The decision comes in the wake of increased pressure on Commerzbank following UniCredit's substantial acquisition of shares in the bank, which has seen the Italian banking giant amassing approximately 28 percent ownership. Of this stake, around 9.5 percent is held directly through shares, while the remaining 18.6 percent is acquired through various financial instruments. Andrea Orcel, the CEO of UniCredit, has expressed interest in a potential takeover of Commerzbank, although no official offer has been made yet. Current regulations stipulate that an offer must be presented to Commerzbank shareholders only if UniCredit's stake surpasses 30 percent.

The management and supervisory board of Commerzbank have voiced their opposition to what they perceive as a hostile approach from UniCredit. Additionally, there is notable resistance from German political circles, particularly given that the federal government still holds approximately 12 percent of Commerzbank's shares, a remnant of the financial bailout during the 2008/09 crisis.

Bettina Orlopp, who has been at the helm of Commerzbank since October 1, is focused on preserving the bank's independence by enhancing profitability and setting ambitious financial targets. The bank aims to significantly increase its earnings, projecting a rise from nearly EUR2.7 billion in the previous year to EUR4.2 billion by 2028. However, the current fiscal year is anticipated to witness a decline in profits to EUR2.4 billion due to the upfront costs associated with the job cuts, which are estimated to reach around EUR700 million.

As Commerzbank embarks on this challenging journey, the emphasis remains on balancing the needs of the business with the welfare of its employees, ensuring a thoughtful approach to the changes that lie ahead.