German insurer Allianz, Europe’s largest insurer, is about to experience some painful cost-cutting, with more than 7000 finance sector jobs to go.

Allianz CEO Michael Diekmann announced the cuts on Thursday, saying the overhaul will also see the company’s German life, health and property insurance operations merge into a single holding company.

He says many employees will leave voluntarily as smaller offices are relocated, and predicts Allianz will not have to lose any German employees until the end of next year.

The company will also cut staff at its Dresdner Bank – bought several years ago and now recovering from being a major drain on capital – by about 2500 employees.

Allianz employs about 178,000 people worldwide, including 36,000 through its German insurance units.