NORTHERN Rock is to axe up to 680 jobs this year as the nationalised bank looks to cut costs ahead of a sale back into the private sector.
The Newcastle-based company said the reduction of its 2,600-strong workforce would mean the loss of jobs at all grades across the company.
But MPs and unions claimed staff were the victims of a “desperate” attempt to find a buyer for the bank with the latest of three rounds of redundancies expected to take its workforce from 6,500 before its crash in 2007 to fewer than 2,000.
Yesterday the Rock’s executive chairman Ron Sandler said: “Economic and trading conditions remain very challenging for a bank like Northern Rock; the mortgage market remains subdued, and the low interest rate environment continues to act as a headwind for banks and building societies primarily funded from retail savings.
“In order to meet our agreed objectives, we must continue to manage our cost base, which is too big relative to the size of the company – regrettably, this will involve job losses.”
The bank had 6,500 staff before it collapsed in 2007 and aims to have fewer than 2,000 by the end of this year. It cut nearly 1,300 jobs in 2008 as it was nationalised and last year it cut another 650 jobs to match the size of its business after it split into a “good” and “bad” bank.
The job losses are more likely to be in the bank’s head office in Gosforth, Newcastle, rather than through the closure of branches. It has started consultation with the Unite union and said it was unlikely to see the first redundancies made before the summer.
David Fleming, Unite national officer, said: “This appalling news of 680 job cuts is scandalous. Another round of brutal job cuts is simply a step too far for this workforce that has already lost a third of colleagues. We are witnessing another move to scale back this already lean organisation in a desperate bid to find a private buyer.
“The staff at this North East-based company have, since near collapse, faced constant change and turmoil with no clarity about their future.”
The announcement comes after Mr Sandler told The Journal earlier this month that after splitting the business into two last year, its cost base was too high. It split the “good” mortgage and savings bank from the “bad” Northern Rock Asset Management, which holds old mortgages and unsecured loans, but was left with too many employees for the size of the business.
