Denmark’s Danske Bank said on Thursday it will cut up to 1,600 jobs in the next year as part of a cost reduction programme that runs until 2023.

Denmark’s biggest bank said part of its “2023 plan” is to significantly reduce Danske Bank’s costs and become an “even more” efficient and competitive bank.

“As a part of this, Danske Bank is now offering employees in most departments in Denmark the option of applying for a voluntary redundancy agreement on special and favourable terms …” said the bank.

“Danske Bank expects to reduce the number of positions across business units and markets by up to 1,600 during the next 6-12 months.

“Part of the reduction is expected to be achieved through among other things the above-mentioned voluntary redundancy agreements and natural attrition.”

Danske Bank employs more than 22,000 people, with about 11,000 in Denmark.

Danske Bank CEO Chris Vogelzang said: “It is never easy to reduce the number of colleagues, and we will do our best to ensure that we do this in the most decent and respectful way.

“However, we need to adapt to the structural changes that the financial sector is experiencing, and to remain competitive in a low-margin and highly competitive market, we simply have to reduce our costs.”

Danske Bank Head of Group HR said: “We will start by giving colleagues who are considering trying something else in their work life or who might want to retire, a better opportunity to do so.

“Specifically, we offer them to do so on better terms and with greater flexibility than would otherwise have been the case.

“Together with the existing hiring freeze, we hope that it can help reduce the number of actual layoffs at a later time.”