Germany’s second largest bank Commerzbank AG Group plans to cut a further 450 jobs as it continues with its cost-cutting program that will ultimately see it slash a total of 5,200 jobs by 2016. It currently has 45,000 workers on its payrolls.
The bank has been implementing a restructuring program after it received a bailout of 18 billion euros from the government after the global financial recession and a M&A gone awry brought it down to its knees, reported Reuters.
The plan will see the finance department shed 350 jobs, mostly accounting-related positions, by 2017 and 100 jobs in Berlin and Duisburg cities. However, the plan won’t affect forex-related jobs. The retrenchment plan is subject to the approvals of the Workers’ Council as per Germany’s labor laws; a decision that may take months to process. This means the decision to extend the layoffs isn’t final.
To compensate for the 450 workers laid off, Commerzbank will outsource part of its accounting tasks to inexpensive companies that it controls such as Eastern Germany-based ComTS and Polish firm Ceri.
“Of course, wages there are much lower. But not only do such moves come with significant severance costs, they also create operational risks,” said a source privy to the matter.
Other German banks have been cutting jobs in the aftermath of the global financial crisis.
The bank’s chief operating officer Frank Annuscheit also revealed that German financial watchdog Bafin had castigated the bank over certain data security flaws following an investigation. However, Annuscheit said the major sticky issues have been addressed. This may result in the creation of additional 30-40 jobs in the information technology department to rectify the problem. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
To contact the reporter of this story; Yashu Gola at email@example.com