Germany: Thousands of job cuts at Deutsche Bank and Commerzbank

Gustav Kemper

After Chief Executive Martin Zielke announced the elimination of 4,300 jobs at Commerzbank in September, Deutsche Bank folowed suit by publicly revealing that 9,000 jobs will be cut at its operations in Germany alone. This amounts to half of the 18,000 global job cuts announced by one of the world’s largest banks in July, a much larger number than had been expected.

Following the failure of merger talks between Deutsche Bank and Commerzbank in April, both banks have pursued savage restructuring plans at the expense of their workforces so as to boost payouts to shareholders and prepare for future takeover battles. Justifying his decision to cut jobs, Zielke declared bluntly that Commerzbank wants “to be an active player in the game of merger poker.”

As in other economic sectors, the banking industry is undergoing a “showdown for global leadership,” as business daily Handelsblatt put it with reference to the German industrial giant Siemens.

Siemens chief executive Joe Kaeser has spoken of a “merger endgame.” A similar agenda is being pursued by the steel producer ThyssenKrupp. The formation of global monopolies is also under way in the chemicals and pharmaceuticals sectors, as shown by the takeover of America’s Monsanto by Germany’s Bayer AG.

Commerzbank’s restructuring programme will involve the closure of 200 of its 1,000 banks. Although 2,000 additional jobs are to be created in other areas, such as operations, IT, and regulatory affairs, the skills required for these jobs are not comparable with those of workers in the banks.

The cost of the job cuts and bank shutdowns has been calculated at €850 million. An additional €650 million is to be invested in digitalising the bank’s operations. The bank intends to raise the costs for these investments by selling its 70 percent share of Poland’s mBank.

The subsidiary Comdirect, 82 percent of which is owned by Commerzbank, will be taken over in full so as to integrate the strong digital operations used there.

Since the beginning of the financial crisis in 2007, the value of Commerzbank shares has collapsed from over €200 to less than €5, a drop of around 97 percent. Germany’s federal government rescued the bank during the crisis with the injection of €15 billion. After the bank paid back the fixed investments in 2011 and 2013, the government retained a 15 percent share in the bank. This was valued at the time at €5.1 billion, but with the current share price it amounts to around €1 billion. The rescuing of the bank was thus paid for through billions in taxpayers’ money and thousands of job cuts.

The declining number of bank branches in Germany demonstrates this trend. According to Germany’s central bank, the Bundesbank, the total number of bank branches in Germany dropped from 40,000 in 2007 to just under 28,000 in 2018.