Italian banking group UniCredit has inked an agreement with Italian trade unions to axe 3,900 local jobs as part of a business plan by new CEO Jean Pierre Mustier to strengthen the bank’s capital.

Overall, the bank is set to cut 14,000 jobs by 2019 as part of the strategy, which was announced in last December.

The bank also announced plans to launch a €13bn rights issue to shed bad loans from the bank’s balance sheet.

The layoffs in Italy will be conducted on a voluntary basis. However, the bank also committed to hiring 1,300 people over the next three years.

“With the agreement defined today, the negotiations with the Trade Unions in the affected countries (Italy, Germany, Austria) have been completed, in a positive and socially responsible manner. On the basis of these agreements, the implementation of the strategic plan actions related to the level of Group, have now been agreed and targets confirmed,” the banking group said.