Italian bank Unicredit plans to cut about 1,000 jobs at its German unit by the end of next year in a bid to slash costs at its ailing retail bank, two people familiar with the matter told Reuters on Wednesday.
The figure for job cuts has yet to be finalized and formal negotiations with labour representatives will start shortly, a third source said.
Unicredit, Italy’s biggest bank by assets, declined to comment.
It was unclear whether these cuts are part of a broader cost-cutting sweep already announced by the bank. Unicredit has said in the past it will shed 800 branches and more than 6,000 jobs as part of a group-wide streamlining program.
Like other European banks, Unicredit is grappling with low interest rates, rising costs from implementing tougher bank rules, and clients who have become risk averse during the euro zone crisis.
Unicredit’s German unit, which employs roughly 19,000 staff, will close almost 50 branches and thin out staff at the remaining ones in response to changing customer habits.
Retail clients are increasingly switching to Internet banking services and are relying less on face-to-face services, the sources said.
Another 400 jobs will be shed as part of a change to the corporate structure which will split the bank’s German operations into two units – one for private clients and one for corporate customers.
This year, the bank will cut 600 jobs, all three sources said, confirming an earlier report in daily Frankfurter Allgemeine Zeitung.
Last year, workers at UniCredit and other Italian banks went on strike to protest against job losses and pay cuts.
Other German banks are also negotiating deeper cost cuts. Germany’s second biggest lender Commerzbank is set to announce job cutback plans this week, and media reports have said that about 6,500 jobs could go.