Munich Re, the world’s biggest reinsurer, will cut as many as 1,350 jobs at its Ergo Versicherungsgruppe insurance unit to reduce costs by about 164 million euros ($201 million) a year.
Ergo’s management will discuss the measures, which are to be implemented by the beginning of 2014, with employee representatives, the Dusseldorf, Germany-based Munich Re division said today in an e-mailed statement. Ergo employed 31,311 people in 2011, indicating the cuts represent 4.3 percent of its workforce.
Munich Re, led by Chief Executive Officer Nikolaus von Bomhard, plans to more than triple profit to about 2.5 billion euros this year. First quarter profit at the primary insurance unit, which mostly consists of Ergo, rose to 145 million euros from 53 million euros a year earlier, Munich Re said May 8.
Ergo will reorganize its five sales divisions into two with “competitive size and unified structures,” the company said. The insurer will seek to make the job losses “socially acceptable,” Ergo said.
Ergo said the cuts will be split between as many as 700 fixed-contract positions in external service and as many as 650 jobs in internal service.
To contact the reporter on this story: Nicholas Comfort in Frankfurt at firstname.lastname@example.org
To contact the editor responsible for this story: Frank Connelly at email@example.com