Looking for profit by the end of 2020

Looking for profit by the end of 2020

As part of its massive job cutting spree, Commerzbank has agreed an outline reconciliation of interests and social plan with the employee representative committees in Germany.

As reported last year, Commerzbank firmed up plans to lay off nearly 5,000 people. According to a letter by German labour union Verdi, the majority of these job cuts – around 3,000 – will be across the bank’s branch network at home in Germany.

In this latest preparation, the bank says these “binding agreements” form the basis for the personnel reductions (job cuts to you and me) as part of its “Commerzbank 4.0” strategy. The latter is its plan to find profit by the end of 2020.

Uwe Tschäge, chairman of the General and Group Works Council, states: “Our aim is to avoid operational redundancies and to cushion the impact of the personnel reductions, as well as to maintain decent jobs for the remaining employees going forward. We are heading in the right direction with the agreements we have struck, and will build on this in our further negotiations.”

Commerzbank and German employee representatives have agreed that redundancies “will be used only as a last resort”.

Some solutions include an age-related part-time working scheme that would come into effect first. Others include provisions for older employees such as early retirement and the “56plus” severance scheme, termination agreements with a severance package, and voluntary individual reductions in working hours.

Large-scale staff transfers are planned as part of the restructuring. To “soften the impact” on the employees affected, the bank says it will provide salary safeguards, commuter grants, opportunities to gain qualifications, and assistance with finding new positions.

Details will be worked out over the coming months. The aim is to complete the negotiations by the end of this year.

The bank plans to have a core workforce of around 36,000 full-time positions by 2020, compared with around 43,000 full-time positions at the end of 2015.

Commerzbank will book restructuring expenses of around €810 million in Q2 2017 for the job cuts. It had previously forecast restructuring provisions of €550 million for 2017 and 2018 respectively. The lower charge is due to the job cuts already implemented, staff turnover and “expected efficiencies” in staff transfers and replacements.