Northern Rock to axe 680 jobs

28 March 2011 | By Natalie Thomas

It has entered formal consultation with Unite, the union, and other employee representatives, on further restructuring of the business.

In its full year results for 2010, the company reported that it remained loss making and that, following the separation of Northern Rock plc from Northern Rock Asset Management, the company had entered 2011 with a high retained cost base.

It says the proposed restructure is intended to improve operational efficiency and to align the total number of employees with the medium term growth expectations of the company.

The company says it aims to minimise compulsory redundancies and will offer voluntary redundancy where possible.  

Ron Sandler, executive chairman of Northern Rock, says: “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. Our aim is to minimise compulsory redundancies where possible and we will offer voluntary redundancy.  

“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.”

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