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Lloyds Banking Group to axe 15,000 jobs

Lloyds Banking Group has announced that it will shed 15,000 jobs over the next three years as part of its strategic review.

The strategic review was launched by Antonio Horta-Osorio, its new chief executive who left Santander UK to join Lloyds on March 1.

The bank says it plans to simplify the group to improve service and deliver £1.5bn of annual savings in 2014, through better end-to-end processes and IT platforms, as well as a delayered management structure and simpler legal structure.

The total cost of the programme will be approximately £2.3bn.

It says the cost savings will enable an additional £2bn of investment over the period 2011 to 2014 to grow its core customer franchise.

Lloyds Group expects to cease trading in 15 of the 30 countries it currently offer services in and will instead focus on UK operations and revitalising its Halifax brand.

The report says: “We will revitalise Halifax as a leading challenger brand in UK retail banking and invest behind Lloyds TSB and Bank of Scotland as leading relationship brands. We will also make a commitment to keep total branch numbers at the same levels through the period, and not to offshore further UK permanent operational roles.”

The lender has also reaffirmed its commitment towards Scottish Widows.

The bank however does not make any new mortgage lending commitments.

The four areas its cost savings will come from are:

  • Operations and processes: It will conduct an end-to-end redesign of its processes, which will include significant process automation, and will materially reduce the number of IT applications. It says this will improve the customer experience increase productivity, and reduce risk, complexity and costs.
  • Distribution and channels: It intends to create a ‘highly efficient distribution platform’, through streamlining its product suite and migrating products to digital distribution channels, encompassing the internet, mobile applications and telephony.
  • Sourcing:It says it will optimise its demand management, simplify specifications and further strengthen  supplier relationships, reducing the number of suppliers to the Group from around 17,000 to under 10,000, and further focusing on a core group of lead suppliers, to achieve approximately a 15 per cent saving on addressable spend.
  • More agile organisation: It says it plans to create a more agile organisation through further delayering its management structure, centralising control functions, and creating a simpler legal structure.

In the report it says: “Our focus will be on reduction in middle management, bringing our top team closer to the customers and front-line staff, and are today committing to keeping total branch numbers at the same levels excluding the EU mandated sale  through the period, and to the present policy of no further offshoring of UK permanent operational roles.

“We expect a reduction of 15,000 roles as a result of the simplification programme over the period.”

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  • Ancient Wisdom...is a mortgage broker in N3 4th July 2011 at 1:28 pm

    ..too many chiefs, not enough indians.

    The good ones will keep their jobs. Alot of my BDM’s turn up in new BMW’s and Mercs and 4x4s – all part of the package right?!

  • Anna Christy 30th June 2011 at 12:50 pm

    I totally agree with the comments about the union in this case. I was daft enough to work for Halifax Building Society (as it then was) back in the early 90’s and found it peculiar that the union for an organisation based in Yorkshire should situate itself in Berkshire. As I worked at an office which administered the mortgage of at least one senior person at said union and was therefore privy to the kind of information you might expect to find on a mortgage file, it did make me resent paying union subs when I was on around £9000 a year.
    With militant action being taken by public sector unions with much less provocation (not that I agree with it) it makes the reaction of the union to the latest announcement of job losses appear even more laughable – an ‘urgent request for talks with the bank’?! That’ll have them quaking in their boots at LBG headquarters!

  • Dan McGeehan 30th June 2011 at 12:48 pm

    Why does’nt the CEO simply apologise for the mess that the bank has created. Rather than shed 15k jobs look to provide excellent customer service by having enough staff. I have used them both as a customer and a broker. On the intermediary side they are always helpful but overworked due to lack of trained staff. As a past customer now there branches where souless unwelcoming caverns.

  • gary wright 30th June 2011 at 11:01 am

    In the 9 years I worked for 2 high street banks, I didn’t bother to join the union. At the time I said they were useless freeloaders. 7 years later & I’m proved completely correct.

    My advice….If you’re a bank employee, stop paying member fees to the union. maybe then they’ll have the incentive to stick up for their members.

  • Cesc 30th June 2011 at 10:59 am

    Que cono es!

  • Cesc 30th June 2011 at 10:58 am

    Que cono es!

  • Phil Shelfrod 30th June 2011 at 10:15 am

    good to see how the unions are standing up for their members rights. what a waste of membership money. Lloyds already provide one of the worst services out there so looks like not only the poor people losing their jobs will suffer but so will Lloyds customers

  • Daniel 30th June 2011 at 9:20 am

    Cut jobs and reduce middle management so we can overwork our underpaid, ground level staff, thus preserving our high profits and obscene, board level wages – propped up, currently, thanks to the taxpaying proletariat.

  • Anon 30th June 2011 at 8:47 am

    We have the mispfortune of banking with lloyds. The bank is ham fisted, inept, old fashioned, and incompetant. Other than that they are a delight to bank with.