Rock staff are invited to apply for redundancy
Jun 27 2008 by Andrew Mernin, The Journal
SALES and IT workers at Northern Rock have received letters offering them voluntary redundancy as plans to cut 2,000 jobs at the lender get under way.
An undisclosed number of workers at the crisis-hit firm’s Gosforth headquarters have been given the chance to take a financial package and leave the firm, the company confirmed yesterday.
The move is part of Ron Sandler’s plan to slash 2,000 jobs by 2011 as the Government looks to repay the taxpayer following the emergency loan taken by the Rock last year.
The firm was unable to reveal how many of its 6,000-strong workforce have already received voluntary redundancy offers, but said the decision was based on the “skills and knowledge” needed to meet the firm’s future targets.
A spokesperson said: “We can confirm that we have moved on to another phase of the collective consultation process by opening a voluntary redundancy register in some areas of the business.
“Letters inviting individuals in these business areas to apply for voluntary redundancy will be issued. We are not disclosing numbers because this remains subject to the consultation process, which is still ongoing. Not all staff will be invited to apply for voluntary redundancy, as the company needs to retain a mix of skills and knowledge.
“We have worked closely with the union Unite throughout the consultation process and the company and Unite are pleased to have reached agreement on this important aspect.”
This is the first time Northern Rock has taken direct action to reduce its workforce since being plunged into crisis late last year.
Last month, Mr Sandler told MPs that, as things currently stand, the Rock would be able to repay the £26.9bn Bank of England loan by the end of 2010, with about £7bn being repaid by the end of 2008.
The move to offer some staff voluntary redundancy does not rule out the future possibility of compulsory job cuts, although Unite is working hard to avoid that.
Mr Sandler first announced the job losses in March in a business plan designed to put the bank on a firmer footing.
Meanwhile, the firm said yesterday that it was still looking into the possibility of offering administrative services to other banks in a bid to safeguard the future of some of its workforce.
The Rock was nationalised in February after the credit crisis forced it to seek emergency funding from the Bank of England.
It had mainly relied on borrowing from money markets, rather than its own deposits, to fund mortgage lending.
The move to seek emergency funding from the Bank of England triggered the first run on a UK bank in more than a century.
