Fewer job losses at Northern Rock than expected

Northern Rock has announced that it is to cut fewer jobs than originally anticipated as part of its ongoing cost-cutting measures.

The nationalised bank has said it now plans to make 1,300 people redundant compared with original plans to axe 2,000 jobs. The lender said 500 staff will leave voluntarily.

The crisis-torn bank was hit by a shortage of funds as a result of the credit crunch last September.

After rejecting takeover bids from the board of Northern Rock and a consortium led by Sir Richard Branson’s Virgin Group, the Government rushed through legislation to nationalise the bank in February.

The Newcastle-based bank is pressing ahead with a cost-cutting programme which includes cutting its residential mortgage lending by half.

The North East Chamber of Commerce said, whilst it is still disappointing that Northern Rock is planning redundancies, the Newcastle Building Society is planning to hire 250 staff.

Furthermore, there are employers in the financial sector aware of the Northern Rock situation that are looking to take on more people, added the Chamber.

Last week, former vice chairman of Barclays, Gary Hoffman, was named as Northern Rock’s new chief executive.

Hoffman, who was with Barclays for 26 years, will replace Andy Kuipers, current chief executive, who is to step down at the end of August after 20 years service. Mr Kuipers is the last member of Northern Rock’s original board to leave the bank after last year’s crisis.

Former Lloyds of London boss, Ron Sandler, who was put in charge of the troubled bank by the Government, will became non-executive chairman when Mr Hoffman assumes his role in October.

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