Commerzbank strikes deal with workers over job cuts

FRANKFURT: Commerzbank employee representatives have agreed a job reduction deal, the bank and union officials said on Friday, paving the way for the German lender to cut 10,000 jobs globally.

The agreement is central to Chief Executive 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. It also includes severance packages and retraining programmes for employees.

Weeks after taking the job as Commerzbank CEO, 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.

Over recent 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 before a 2019 move to Deutsche Bank, where he was head of retail operations in Germany. He joined Commerzbank at the start of 2021.