(MENAFN- Khaleej Times) Commerzbank, Germany's second-biggest bank, will cut 4,000 to 6,000 jobs over the next four years to reduce costs and meet its profit goals.
The job reductions will apply to all units worldwide with the retail bank having "significant overcapacity," according to an internal memo obtained by Bloomberg news, the contents of which were confirmed by spokesman Simon Steiner in Frankfurt. Chief executive officer Martin Blessing declined to comment on the cuts at the World Economic Forum in Davos, Switzerland.
"If we want to reach our profit and growth targets amid a continuous difficult environment, we need to adjust the staff structure," Ulrich Sieber, management board member responsible for human resources, said in the memo.
Commerzbank, which took over Dresdner Bank at the height of the financial crisis and subsequently got a state bailout of €8.2 billion ($24 billion), has been criticised for not providing a convincing strategy to cut costs as it offloads sovereign debt and exits shipping and property units. Like other European banks, higher capital requirements from regulators and the debt crisis are forcing it to reorganise.
The company, which hasn't paid a dividend since 2008, rose 0.3 per cent to €1.635 at 12.32am on the Stoxx 600 Banks Index, advancing for the first time in three days. It fell as much as 2.9 per cent earlier on Thursday.
Commerzbank will start talks with labour representatives on the reductions next month, according to the memo.
"The job cuts are an important step for Commerzbank to reach their cost-saving targets," Philipp Haessler, an analyst at Equinet AG in Frankfurt, who recommends buying the shares, said by telephone. "But it is only a part of the new strategy. The even more important part still needs to come. The bank should make clear how it'll boost revenue at the retail bank." Commerzbank had 56,287 staff in September, according to its third-quarter earnings statement.
Forced staff losses will be a last resort, the bank said in the memo.
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