Troubled German property lender Hypo Real Estate said Saturday it will slash its workforce by almost half in three years, part of draconian moves to save it from near bankruptcy. "The number of employees will go from some 1,800 to about 1,000 over the next three years," the private bank said in a statement, adding that two-thirds of the axed jobs would be outside Germany.
"Given the new situation in the capital markets... there is no other alternative to our extensive restructuring programme," said chief executive Axel Wieandt in the statement. The Munich-based bank, Germany's biggest victim of the global banking crisis, stressed that it would also sell off some of its activities, hoping to avoid as many redundancies as possible.
The bank says its restructuring plan should allow it to save 600 million euros (835 million dollars) over the next three years, and another 500 million euros to 2013. Hypo Real Estate and its Irish subsidiary Depfa were caught up in a liquidity crunch that worsened after the US investment bank Lehman Brothers declared bankruptcy in September.
Hypo Real Estate has already benefited from some 30 billion euros in a rescue plan worked out by the German government and the country's central bank in October. Hypo Real Estate posted a net loss of 3.1 billion euros in the third quarter, and said in its statement Saturday that it expects to report new losses in its fourth quarter and annual results.