HBOS announces job losses


HBOS, Britain’s biggest mortgage lender, said 650 workers are to lose their jobs over the next 18 months as part of plans to merge two of its business banking divisions.

The banking giant also said that in addition to the 650 job losses, a further 350 staff within the new division will be transferred to alternative roles.

It is merging its 1,000-strong business banking arm, which sits in the group’s retail division, with the group’s commercial business in the corporate division to create a single unit focusing on small and medium-sized businesses.

The bank aims to reduce the jobs through voluntary severance, normal staff turnover and further redeployment.

The financial services sector remains a concern for many as the slowing economy means it is the subject of constant speculation.

A recent survey, conducted by the Confederation of British Industry (CBI) and PriceWaterhouseCoopers (PWC) has established that a further 10,000 City jobs will go in the financial services sector over the next 3 months, due to the ongoing credit crunch.

In the previous quarter, between 10,000 and 11,000 jobs were lost as a result of the credit crunch.

According to John Hitchens of PWC, banks have made their gloomiest profitability predictions for 14 years and confidence in the industry has declined the most sharply for a decade.

Last month, Wall Street giants, Citigroup and Goldman Sachs, announced staff cuts. Citigroup, which is America’s largest bank, is axing up to 6,500 investment banking jobs.

Just 2 months ago, Citigroup said that 9,000 jobs would go in addition to the 21,000 laid off in the last 12 months.

Goldman Sachs, which has emerged from the credit crunch relatively unscathed, is also eliminating 10% of its workforce in the M&A and corporate fundraising divisions this year.

Other investment banks to reveal job cuts include Swiss investment bank, Credit Suisse, who plans to axe 75 jobs in in its investment bank and support services division in the UK.

UBS, which is Switzerland’s largest bank, has reduced its workforce by almost 7% after being hit by heavy losses. It is one of the biggest victims of the credit crunch.

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