Northern Rock has announced plans to cut 650 jobs by the end of the year, and could not say if IT roles would be safe.
The cuts, subject to consultations starting today, will be made at the nationalised bank’s Gosforth, Newcastle and Sunderland sites. Northern Rock also plans to close its final salary pension scheme for remaining employees, and move them to a money purchase scheme.
Although a spokesperson for Northern Rock said that it was “too early” to say if IT jobs would be lost, he confirmed that the majority of IT staff were based in Gosforth.
Northern Rock aims to reduce costs in preparation for returning to the private sector. Furthermore, Gary Hoffman, chief executive of Northern Rock, said the move was necessary to “align” its staffing level “to match the smaller size of the business”.
Meanwhile, the bank said it hopes to avoid compulsory redundancies, and has started talks with trade union Unite.
Rob MacGregor, Unite national officer, said: “The decision by Northern Rock management to cut over 20 percent of its workforce and alter the pensions of the remaining staff is devastating.”
According to Unite, Northern Rock has reduced its staff base by over 2,000 since 2008, the year the bank was nationalised.
“It is unacceptable that we are now seeing rash decisions based on a short-term management strategy in order to make Northern Rock appear more attractive to a private seller,” said MacGregor.
The bank currently employs 4,500 workers.
Last year, government auditors said that poor IT systems at Northern Rock prevented the government from being able to wind down the bank when it became a casualty of the subprime mortgage crisis in 2007.
The Royal Bank of Scotland also recently announced 500 job cuts in its wealth management division, which includes IT staff.
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