Partner Article

Northern Rock to axe 680 staff

Northern Rock plc announced yesterday that it is to shed 680 jobs as it aims to cut costs and restructure.

The nationalised lender said job losses would affect employees at all levels.

The bank said trading conditions remained “very challenging”, due in part to the subdued mortgage market.

Earlier this month, the company reported a loss of £232.4m for 2010, but said it was making progress.

Ron Sandler, executive chairman of the group, said: “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,”

“Our aim is to minimise compulsory redundancies where possible and we will offer voluntary redundancy.”

Northern Rock was nationalised in 2008 to save it from collapse during the financial crisis.

Last year, the bank was split in to two separate entities.

Northern Rock PLC, which holds savers’ deposits and new mortgages, while the Northern Rock Asset Management, holds the rescued bank’s old mortgages and unsecured loans.

The government wants to sell off Northern Rock PLC and recoup some of the taxpayers’ money spent on the rescue.

Before the financial crisis, the combined workforce of the two banks was about 6,500.

When Northern Rock PLC was established last year, it employed about 4,500 people. This latest announcement reduces its workforce to fewer than 2,000.

This was posted in Bdaily's Members' News section by Ruth Mitchell .