Abbey National, the beleaguered high street bank, yesterday unveiled the first evidence of its root and branch cost-cutting programme, saying 95 jobs are to be lost in its marketing and communication departments.
The bank said in July that it would thoroughly review all of its divisions, signalling that further redundancies were likely. The UK's second largest mortgage bank is overhauling its business after a very bumpy 12 months, which included the emergence of a £272m black hole in its wholesale banking business and the resignation of its chief executive, Ian Harley.
Abbey said that it wanted to cut costs when it reported its half-year results in the summer. The bank said: "A priority as we move into the second half of 2002 to 2003 is to challenge thoroughly the cost base of the organisation."
Speculation has been mounting that Abbey plans to axe 3,000 staff out of its total workforce of 28,500. It is unlikely that the number will be this high, but Abbey said it could not give guidance on the final figure because it depends on the outcome of the reviews of different parts of the business.
The 95 staff being made redundant currently work in Abbey's Milton Keynes and Bradford offices. The bank said 78 work in marketing and 17 in internal communications in its retail business.
Abbey National is trying to cut expenses after first-half profits fell 35 per cent to £457m. The company is still searching for a new chief executive, after Mr Harley left in July. Lord Burns, Abbey's chairman, is running the bank in the meantime.
The bank redirected its business after problems emerged at its wholesale banking arm in June.
Mr Harley said at the time that Abbey would cut its exposure to risky corporate lending to concentrate instead on Abbey's core mortgage and retail business.
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