Allianz AG to reduce German insurance workforce by 5,000

Allianz AG has announced plans to reduce the number of workers at Allianz Deutschland AG (ADAG), its German insurance operation, by 5,000.
It also plans to cut another 2,480 jobs at its Dresdner Bank subsidiary.
Allianz’s announcement said the move would help fulfill its 2008 goal to make its “insurance business more customer focused, operate more efficiently and achieve growth.”
Allianz said its new operating model would “include an updated concept for business locations and employee counts,” resulting in cost savings of between 500 million and 600 million [US$628 million to US$753 million].
Restructuring costs are estimated at 500 million (US$628 million).
Most job cuts will result from the closure of “administrative locations in Germany from the current 21 to 10,” Allianz AG said in a release. The model calls for four service areas, each having one major location. The four areas encompass Berlin, Munich. Hamburg, Hanover, Bremen, Stuttgart and Karlsruhe.
After the restructuring, 25,000 office and sales positions will be preserved at the remaining locations, while 5,000 jobs will be cut, Allianz AG announced.
Allianz Group CEO Michael Diekmann discussed the restructuring in an interview on the group’s Web site (www.allianz.com). “Unfortunately, the measures that have been announced are absolutely necessary,” he said. “Over the past few years in Germany, particularly in insurance business, we have been continually losing clients and therefore market share.”
Diekmann said ADAG “will make no compulsory redundancies until the end of 2007. We have also agreed on an extensive social welfare plan for the German insurance companies.”
Gerhard Rupprecht, CEO of Allianz Deutschland AG, said: “The improvements we initiated will make us more competitive in acquiring new business. We are also starting a number of growth initiatives with the objectives of product innovation, improved support for our sales partners and increased focus on the customer. We are convinced that we will be able to bring about a sustainable improvement in our market position.”