Northern Rock axes 1,300 jobs

Northern Rock says it will lay off 1,300 staff as part of a plan to cut the workforce to 4,000 by 2011.

The nationalised bank will chop 800 staff through compulsory layoffs while the remaining 500 will leave through a voluntary redundancy scheme, said the bank as its negotiations with unions ended. The bank had 6,000 employees at the end of last year.

The voluntary redundancy plan makes the proposed layoffs less stringent than the original prediction of Northern Rock losing 2,000 staff members by 2011. Further reductions in the workforce will be made by not replacing staff members leaving the bank.

‘Confirming job losses is never easy but our staff have been kept well informed and the need to contract the size of the company is well understood,’ said Ron Sandler (pictured), executive chairman of Northern Rock.

‘This remains a very tough time for our staff but the restructure of the company is nearing completion and we are now in the final phase of this difficult process,' Sandler added.

A three-year deal to refer Northern Rock customers needing to remortgage to Lloyds TSB has saved 100 jobs at the Newcastle-based bank. Staff members in the compulsory redundancy scheme have entered a consultation period which will last 30 days.