Finance

Commerzbank strikes deal with workers over job cuts By Reuters

© Reuters. FILE PHOTO: A Commerzbank logo is pictured before the bank’s annual news conference in Frankfurt, Germany, February 9, 2017. REUTERS/Ralph Orlowski

FRANKFURT (Reuters) – Commerzbank (DE:) employee representatives have agreed a job reduction deal, the Verdi labour union said on Friday, paving the way for the German lender to cut 10,000 jobs globally.

The agreement is central to Chief Executive Officer Manfred Knof’s plans to streamline the nation’s second-biggest listed lender and return it to profitability.

The deal includes early retirement and reduced hours for older employees, Verdi said. It also includes severance packages and retraining programmes for employees.

Weeks after taking the job as Commerzbank’s CEO, Knof announced plans to cut 10,000 jobs and close hundreds of branches in a 1.8 billion euro ($2.2 billion) restructuring.

Over the past months, management has negotiated the reductions with labour representatives, hoping to clinch a deal before the bank’s annual shareholder meeting this month.

Commerzbank hopes the revamp will revive its fortunes, as it struggles to restore profits 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.

Knof told employees in January that cuts were a necessary “bitter pill”.

Christoph Schmitz, a Verdi official, 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 giant Allianz (DE:) before joining Deutsche Bank (DE:) in 2019, where he was head of retail operations in Germany. He joined Commerzbank at the start of 2021.

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