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Commerzbank is considering cutting thousands of jobs as it tries to fend off unwanted growth at Italy's UniCredit, according to people familiar with the matter.
The plans, which have yet to be confirmed, are expected to be revealed to the labor council in the coming weeks, two of the people said. One person familiar with the discussions told the Financial Times that the number could be “in the low thousands”.
The new head of the German lender, Bettina Orlopp, due to present a revised plan on February 13 to show that the bank can improve profits and payments to shareholders themselves.
UniCredit, led by chief executive Andrea Orcel, has built a position Commerzbank which has the ability to make it the largest shareholder of the bank if it receives regulatory approval.
Orcel He has made no secret of his ambitions at Commerzbank, including a complete takeover of the German rival.
Investors in Commerzbank have largely supported the deal – with the exception of the German government, which still holds a 12 percent stake after selling a 4.5 percent stake in UniCredit last year.
Analysts expect the merger to lead to billions of euros in cost savings, as the expanded bank sheds double-digit jobs.
An important point of opposition to the unions and the government has been the possibility UniCredit holding an ax in Germany, where it already has a German subsidiary, HypoVereinsbank (HVB).
Commerzbank unions have warned that a takeover of UniCredit could put up to 15,000 jobs on the line – an issue that has taken on an extra level of political sensitivity ahead of Germany's federal election, which is being held next month.
The potential for Commerzbank to start shrinking even without a takeover by the Italian bank would mark another chapter in its long restructuring.
Commerzbank has already cut thousands of jobs and closed around half of its 800 branches since 2021, when former chief executive Manfred Knof launched a turnaround effort.
These changes helped increase operating profits and triple the bank's share price over the past three years, and in 2023 it launched the first share buyback program in its history.
But UniCredit's stakebuilding has put additional pressure on the German bank to demonstrate that it can deliver better profits and value to shareholders as an independent company than as part of the Italian banking empire.
Germany's second-largest bank has struggled to cope with higher costs than rivals, including HVB. Orlopp has already raised Commerzbank's performance targets since UniCredit's approach in September.
Even some insiders have expressed doubts about whether Commerzbank can hope to present a stand-alone case that would offer shareholders more value than the merger, given the potential synergy of the deal.
One person with knowledge of the matter suggested that Orlopp was now planning to accelerate further restructuring that was previously seen as an option in the future.
One person familiar with the discussions indicated that the job cuts could be driven by digitization, particularly the adoption of artificial intelligence, and IT jobs that could be “set aside” in other European countries besides Germany.
Commerzbank said that the plan update, because it will be presented with its results for the full year next month, is still being developed, and “we cannot exclude future discussions with the management boards and the management boards”.