In response to Andrea Orcel, Commerzbank is considering cutting thousands of jobs
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Commerzbank is considering cutting thousands of jobs to fend off unwanted advances from Italy’s UniCredit, people familiar with the matter say.
The plans, which have not yet been formalized, should be presented to the works council in the coming weeks, two of the people said. A person familiar with the discussions told the Financial Times that the figure was likely to be “in the low thousands.”
The German lender’s new CEO, Bettina Orlopp, will present an updated strategy on February 13 to show that the bank can improve its profitability and shareholder distributions on its own.
UniCredit, led by CEO Andrea Orcel, has established a position in Commerzbank That has the potential to make it the bank’s largest shareholder if it receives regulatory approval.
Orcel has made no secret of his ambitions for Commerzbank, including a full takeover of the German rival.
Commerzbank investors have generally supported a deal – with the exception of the federal government, which still holds a 12 percent stake after selling a 4.5 percent stake to UniCredit last year.
Analysts believe a merger would result in billions of dollars in cost savings as the enlarged bank would eliminate duplication of functions.
A key point of resistance from both unions and the government was the potential for UniCredit to swing the ax in Germany, where there is already a German subsidiary, HypoVereinsbank (HVB).
Commerzbank unions have warned that a takeover by UniCredit could put up to 15,000 jobs at risk – an issue that has taken on an added dimension of political sensitivity in the run-up to next month’s federal election.
Commerzbank’s potential to make cuts even without a takeover by the Italian bank would mark another chapter in its lengthy restructuring.
Commerzbank has already cut thousands of jobs and closed around half of its 800 branches since 2021, when former CEO Manfred Knof launched a restructuring measure.
The changes have helped boost 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.
However, UniCredit’s stake build has put additional pressure on the German bank to prove that as an independent company it can offer better profitability and greater value for shareholders than as part of the Italian banking empire.
Germany’s second-largest listed bank has struggled to get to grips with higher costs than those of its rivals, including HVB. Orlopp has already raised Commerzbank’s performance targets since the UniCredit approach in September.
Even some insiders have expressed doubts about whether Commerzbank could hope to present a standalone case that would deliver more value to shareholders than a merger, given the potential synergies involved in a deal.
A person familiar with the matter suggested that Orlopp now plans to accelerate another restructuring, previously seen as an option for the future.
Another person familiar with the discussions noted that job cuts could be driven by digitalization, particularly the use of artificial intelligence, with IT functions potentially moving “nearshore” to other European countries outside Germany.
Commerzbank said the strategy update, to be presented next month alongside the annual results, was still in development and “cannot pre-empt the upcoming discussions in the board and supervisory board.”
