Rock gets ready to make redundancies

Apr 26 2008 by William Green, The Journal

NORTHERN Rock is expected to begin the formal process that could lead to 2,000 job losses within days.

The Government could be formally notified about job cuts next week, which will kickstart a 90-day consultation with unions – although redundancy notices are unlikely until much later in the process, with details dependent on the talks.

The scale of job losses will be disclosed to ministers in an HR1 form, legally required when a firm proposes redundancies of more than 20 employees.

But the Newcastle-based lender has already said it expects to cut around 2,000 jobs – potentially many in the region – with most going over the next 12 months.

The Rock’s network of branches is planned to be maintained in a drive to recover from the crisis that struck amid the global credit crunch last year and led to nationalisation in February.

But bank staff will be worried, and it could cast a shadow over Gordon Brown’s local election campaign, already hit by the 10p tax row.

TUC regional secretary Kevin Rowan said the consultation over job losses was beginning but “fully anticipated” the bank’s management will work with unions to make the process as painless as possible.

“We also know they have already got people in place to support staff who may wish to leave the organisation in that process to help them find other employment,” said the union chief.

He also criticised southern-based media for creating a bad image of the region after reports of job losses appeared within weeks of the run on the bank, but praised The Journal for its support for the North East.

Other financial institutions were interested in investing in the region and could employ highly-skilled Rock staff, while tens of thousands of other vacancies were available, added Mr Rowan.

Andrew Sugden, from the North East Chamber of Commerce, said it was an unsettling time for bank staff but stressed the regional economy was “incredibly positive”.

“At the moment, we understand there are over 5,000 jobs in call centres, many of which would be perfect for many of the people affected at Northern Rock,” added Mr Sugden.

Berwick Liberal Democrat MP Alan Beith said he wanted as many jobs to remain at Northern Rock as possible but stressed it had to be a viable business.

He added that Newcastle council leader John Shipley was working with Tyneside firms to help affected workers, but stressed the Government should help because it shared some of the blame for the Rock’s troubles.