Commerzbank to take $745mn hit for job cuts

Bloomberg

Commerzbank AG will set aside 610 million euros ($745 million) in the fourth quarter to cover restructuring costs after reaching an agreement with the works council on planned job cuts.
The amount will cover the elimination of 2,300 positions between 2021 and 2024, part of a restructuring plan announced last year, according to a statement from the bank. Commerzbank said it plans to detail further measures under a strategy overhaul to be finalized in the first quarter.
Bloomberg previously reported that Supervisory Board Chairman Hans-Joerg Vetter and incoming Chief Executive Officer Manfred Knof are working on a more ambitious cost-cutting plan to replace the one from last year, with about 10,000 jobs on the line.
The restructuring provisions will have “a correspondingly negative impact on the net result,” Commerzbank said in the statement. The bank has previously said it’s likely to post a loss in 2021 because of higher risk provisions on
the back of the pandemic as well as elevated restructuring costs.
Knof, a former Deutsche Bank executive, will formally join Commerzbank in January. He will then review the new strategy before the bank announces the details in the first quarter.
The restructuring provision in the fourth quarter comes on top of 200 million euros booked in the previous three-month period. Both are part of headcount reductions announced last year under a strategy dubbed Commerzbank 5.0. That plan called for 4,300 jobs to be cut 2023, while also adding 2,000 new positions in different areas.
Unveiled under then-CEO Martin Zielke, the strategy disappointed investors and ultimately culminated in a leadership crisis when Zielke and then-Chairman Stefan Schmittmann jointly resigned.