Northern Rock's management team was described yesterday as "short term" and "rash" for planning to shed 650 of the state-owned bank's 4,500 remaining staff. The company dealt those who remain a further blow by closing the final salary pension scheme to future contributions.
All grades of staff will be affected by the job-cutting programme, and Northern Rock has entered a 90-day consultation period before the first of the cutbacks.
The chief executive, Gary Hoffman, said: "We remain in public ownership and it is important that we continue to deliver value for taxpayers. There is still a challenging economic environment and... to meet our objectives we must align our staffing level to match the smaller size of the business."
He pointed out that the Rock now did only a fifth of the mortgage business it did at its peak. But Rob MacGregor, of the Unite union, said the decision was "devastating" and customer service would suffer.