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Commerzbank is exploring cutting thousands of jobs as it seeks to ward off unwanted advances from Italy’s UniCredit, according to people familiar with the matter.
The plans, which have not yet been formalized, were expected to be unveiled at the workers’ council in the coming weeks, two of the people said. A person familiar with the discussions told the Financial Times that the figure is likely to be “in the low thousands”.
The German lender’s new chief executive, Bettina Orlopp, will present an updated strategy on February 13 to show the bank can improve profitability and shareholder payouts on its own.
UniCredit, led by chief executive Andrea Orcel, has built a position in Commerzbank that has the potential to make it the bank’s largest shareholder if it secures regulatory approval.
Orcel has made no secret of his ambitions for Commerzbank, including a full takeover of the German rival.
Investors in Commerzbank have been generally supportive of a deal – with the exception of the German government, which still holds a 12 percent stake after selling a 4.5 percent stake to UniCredit last year.
Analysts predict that a tie-up would result in billions of euros in cost savings, as the expanded bank removes duplicate functions.
A crucial point of resistance from both unions and the government has been the potential for UniCredit to use the ax in Germany, where it already has a German subsidiary, HypoVereinsbank (HVB).
Commerzbank unions have warned that a takeover by UniCredit could cost up to 15,000 jobs – an issue that has taken on an extra dimension of political sensitivity ahead of Germany’s federal election next month.
The potential for Commerzbank to push for cuts even without being taken over by the Italian bank would mark another chapter in its protracted restructuring.
Commerzbank has already cut thousands of jobs and closed roughly half of its 800 branches since 2021, when former chief executive Manfred Knof launched a turnaround effort.
The changes have helped boost operating profits and triple the bank’s share price in the past three years, and in 2023 it launched the first share buyback program in its history.
But the build-up of UniCredit’s stake has put extra pressure on the German bank to prove it can deliver better profitability and value to shareholders as an independent company rather than part of the Italian bank’s empire.
Germany’s second-largest listed bank has struggled to cope with costs that are higher than those of rivals including HVB. Orlopp has already raised Commerzbank’s performance targets since the UniCredit approach in September.
Even some insiders have expressed doubts whether Commerzbank can hope to present a stand-alone case that would offer shareholders more value than a merger, given the potential synergies involved in a deal.
A person with knowledge of the matter suggested Orlopp was now planning to accelerate a further restructuring previously seen as an option for the future.
Another person familiar with the discussions indicated that the job cuts could be caused by digitalisation, particularly the adoption of artificial intelligence, with IT functions potentially “coming in” to other European countries outside of Germany.
Commerzbank said the strategy update, to be presented alongside its full-year results next month, was still being developed and “we cannot prevent future discussions in the management and supervisory boards”.
