Northern Rock to axe 680 more jobs
Nationalised lender Northern Rock expects a further 680 job losses by the end of the year as it moves to drive down its costs.
The taxpayer-owned bank, which recently posted an annual loss in 2010, said the cuts are necessary as it tries to return to profit and prepares for a return to private ownership.
Northern Rock was nationalised in February 2008 after it collapsed amid the credit crisis, sparking the first run on a UK bank for 150 years.
It employed a workforce of around 6,500 in 2007; this latest announcement reduces the workforce to fewer than 2,000.
Northern Rock said its costs were currently too big relative to the size of the company and it had to reduce the number of employees to match its medium term growth expectations.
Ron Sandler, executive chairman, 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 company said it would minimise compulsory redundancies where possible and would offer voluntary redundancy.
Mr Sandler said: "This is an unsettling time for our employees, who have been through a lot in the last few years. We will keep them well informed throughout the process and provide support to those who are affected."
Northern Rock said it entered formal consultation with Unite, the union, and other employee representatives on further restructuring of the business.