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June 9, 2010    

Turnaround plan sees further 650 jobs go at Northern Rock

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by Kay Murchie

Nationalised Northern Rock has announced it will axe a further 650 jobs by the end of the year as it prepares to return to the private sector.

The reduction in headcount is part of the bank’s radical turnaround plan and comes just one week after it said it is to close its banking operation in Guernsey in September.

Commenting on the job losses, chief executive, Gary Hoffman, said: “We must align our staffing level to match the smaller size of the business.”

However, he pledged to avoid compulsory redundancies “wherever possible”.

Meanwhile, the crisis-torn bank also said it will close its final salary pension scheme.

The scheme, which has 850 members, was closed to new members over a decade ago. However, the bank said members will be offered access to the company’s money purchase scheme instead.

The company, which currently has a workforce of around 4,500, collapsed in the autumn of 2007 when savers staged a nationwide run on the bank. This signalled the onset of the banking crisis.

Earlier this year, it was split into two divisions – a “good bank” of profitable assets and “bad bank” of toxic debts.

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