Northern Rock 'close' to decision on job cuts

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Indy Politics

Northern Rock is close to submitting a plan expected to outline 2,000 job cuts to the Government, the bank's chairman said today.

Ron Sandler said Northern Rock's management team was "fairly close" to finalising the legally-required redundancy form but would not confirm reports that it will be delivered to ministers next week.

The plan will start a 90-day consultation with unions over job cuts, with Mr Sandler suggesting that the total number of redundancies would be around 2,000.

These jobs would go "over some period of time", he said.

The beleaguered bank was nationalised in February after Chancellor Alistair Darling failed to attract a buyer in the private sector.

Mr Sandler, the City trouble-shooter charged with running the publicly-owned bank, said at the time that the business would have to be slimmed down.

The scale of proposed job losses will be disclosed to ministers shortly in an HR1 form.

The document is legally required by the Government when a firm proposes redundancies of more than 20 employees.

Mr Sandler said: "We are about to start a consultation with the unions - it has not yet begun.

"The process will start with a submission to the Government. It will be submitted when we are ready. It is fairly close."

Reports today suggested that staff at the bank would be made redundant within three months. Previous estimates put the time-scale of job losses at three years.

Mr Sandler said: "I have said in the past that I expect the restructuring to be in the order of ... 2,000 is my expectation at the end of the process - over some period of time."

Confirmation of job cuts will prove a further blow to the Government.

The vast majority of job losses will be concentrated in the North East - a traditional Labour heartland.

Mr Sandler has previously said that the bank's 78-strong branch network would not be reduced, with the branches being key to its aims to boost saving deposits.

The bank employs around 6,000 staff.

A task force, the Northern Rock Response Group, has been set up by businesses and local authorities in the North East to help those made redundant.