Hypo Real Estate to cut one-third of workforce

Hypo Real Estate to cut one-third of workforce
The last one turns of the light! HRE headquarters in Munich. Photo: DPA
Troubled German property lender Hypo Real Estate (HRE) plans to restructure its activities in a move that would eliminate one third of its workforce, a press report said on Friday.

HRE, which employs around 1,800 people, was also in talks on other measures to protect its activities with the German government’s financial stabilization fund, or SoFFin, the magazine Der Spiegel reported.

A spokesman for the bank contacted by AFP declined to comment on the report. On December 10, the specialist in property financing said it would receive €30 billion ($42.7 billion) in state loan guarantees rather than €20 billion under a government rescue plan for the banking sector.

HRE, Germany’s biggest victim of the banking crisis, and its Irish subsidiary Depfa, were caught in a liquidity crunch that worsened after the US investment bank Lehman Brothers declared bankruptcy in mid September.

HRE has already benefited from a rescue plan worked out by the government and the German central bank worth €50 billion.