Commerzbank is planning a wholesale shakeup of its internal structure cutting 10,000 of its 40,000-strong workforce.
The news follows CEO Martin Zielke and chairman Stefan Schmittmann stepping down from their roles at the top of the German bank earlier this week.
The pair were under pressure from vocal Commerzbank shareholders, major investor Cerberus Capital Management, and German trade union Verdi.
Cerberus claims Commerzbank’s management focuses on unprofitable growth. It also hinted at a potential shareholder revolt.
The equity firm demanded two seats on the board and the cutting of 7,000 jobs. Commerzbank refused its demands.
The German lender announced its acceptance of Zielke and Schmittmann’s resignations a few days later.
“Even if we made strategic progress, the financial performance of the Bank has been and is unsatisfactory,” Zielke says in a statement.
“I would like to open the way for a fresh start. The bank needs a profound transformation and a new CEO, who gets the necessary time from the markets to implement a strategy.”
Reuters sources report that the CEO and chairman had also lost the confidence of employees.
Cuts and unions
Local newspaper Handelsblatt has been reporting on the job cutting programme, set to gut Germany’s second-largest bank.
Zielke announced in September last year that 4,300 jobs and 200 branches would be cut. Stefan Wittmann, Verdi trade union secretary and member of Commerzbank’s supervisory board, agreed on the cuts in principal.
Handelsblatt writes that Commerzbank drew up new plans to close 450 of its 1,000 branches and reduce its workforce of 40,000 by as much as 25%. The Verdi union was not privy to these discussions. It sabotaged the bank supervisory meeting in protest.
Uwe Tschäge, chairman of the company works council and deputy chair of the supervisory board, told Handelsblatt that he would not stand in the way of “socially acceptable” job cuts.