Northern Rock is to cut at least 2,000 jobs in the next three years as it shrinks itself to pay back £25bn of borrowing from the Bank of England.
Ron Sandler, the executive chairman brought in by the Government to run the bank, refused to rule out compulsory redundancies as the company's workforce of 6,000 is cut by a third. Most of the cuts will be in the first year.
Northern Rock is the biggest private sector employer in the North-east after growing rapidly to become Britain's fifth-biggest mortgage lender. It was building a centre for up to another 2,500 staff in Sunderland before the credit crisis shattered its business model. Mr Sandler said: "Clearly the loss of any jobs is regrettable... Northern Rock will remain a major employer in the North-east." He declined to give details of where the cuts would be made before the bank formally consulted the union Unite.
Graham Goddard, the deputy general secretary of Unite, said: "News that staff numbers will be reduced as part of the restructuring plans for Northern Rock will cause further uncertainty for the workforce."
Mr Sandler intends to roughly halve the bank's £110bn balance sheet by 2011 so that the Bank of England's loans can be repaid.Reuse content