As part of a digitalisation and restructuring process, Germany’s Commerzbank plans to slash about 10,000 jobs, that is about one-fifth of its total employee base, and close down 340 branches over the next four years. The Bank plans to focus on online banking and offer cashless payment modes. The Bank’s staff strength stood at 39,600 in September 2020. It had already shut about 200 branches following a net loss of about 69 million-euros in the third quarter of 2020.
The number of branches of the Bank will be reduced from 790 to 450, resulting in cost savings to the tune of 1.4 billion euros, that is 20 per cent saving in four years.
With growing digitalisation, the Bank has realised that there is no need to maintain so many physical branches. It had already announced about 2,900 job cuts in 2020. Commerzbank hopes to be able to meet the expenses of restructuring expenses, that is, about 1.8 billion euros, from its current funds. It had reportedly allocated 800 million euros for the same in 2020.
The layoffs will be discussed further by the Board next month. However, it is quite clear that the Bank plans to do all it can to reduce costs across departments and functions, and focus on ways to increase profitability in the next four years, putting “profitability before growth”.