Allianz

(AZ)

, the German insurance giant, plans to eliminate several thousand jobs and close a number of offices in a bid to cut out some of its expenses.

Saying it's been losing market share for years, the "group intends to have introduced a new operating model by 2008, which will include an updated concept for business locations and employee counts," a statement on the Allianz Web site read.

Going forward, Allianz's German division will operate from 10 administrative locations, down from the current 21. About 5,000 employees will lose their jobs, Allianz said. After the restructuring, roughly 25,000 office and sales positions will remain at the locations Allianz is keeping.

Allianz expects to save between 500 million and 600 million euros (about $629 million to $754 million) through the moves, which will cost around 500 million euros.

"We have by no means taken this decision lightly, especially as we are extremely conscious of its effect on people's lives," said Gerhard Rupprecht, CEO of Allianz Deutschland. "These are painful but necessary steps to ensure a sustainable increase in Allianz's competitiveness."

Published reports indicated Allianz is also cutting nearly 2,500 additional jobs at its Dresdner Bank unit.