Lloyds Banking Group reveals hundreds more job cuts in “dangerous race to bottom”
Lloyds Banking Group is making a further 625 people redundant as part of a restructure that will result in a 10 per cent reduction in headcount.
Around 80 of the jobs being cut will come from the IT department, which the bank is planning to offshore to India in what union Unite has dubbed "a dangerous race to the bottom", noting the number of glitches that several major banks have suffered in recent months.
Other affected divisions are thought to include group operations, risk, group finance and group strategy.
The bank is creating 195 new roles, which will offset the total reduction in headcount, however it is not clear which divisions the new positions will appear.
The bank already revealed 1,000 jobs would be cut back in November, and a further 1,755 jobs to go from its retail and commercial businesses, as well as consumer finance and legal departments two months ago.
In total the bank is planning to make 9,000 positions redundant. It has already cut around 5,600 from the payroll.
A spokesman said confirmed the cuts came as part of the previously announced total.
He added: "As part of our group strategic review, we also announced 200 branch closures over the three year period.
"Today we can confirm that we will be closing 21 branches during July 2016 as part of this strategy. Branches will continue to play an important role in our multi-channel approach to meeting customer needs and we expect to continue to have the biggest branch network in the UK."
The branches are: Kingsley Park, Heslington, Abbeydale Road, Chipping Sodbury, Abbots Langley, Studley, Ashton Preston, Bebington, Southborough, Cross Hands, East Molesey, Bredbury, Evington Road, Harlescott, New Ferry, Pembroke, Hawarden, Selly Oak, Penryn, Wylde Green and Penwortham Preston.
But despite Lloyds' attempts to offer the olive branch, union officials were unimpressed.
John Morgan-Evans, Unite's regional officer, said: “It is alarming that Lloyds are continuing to offshore IT roles in the name of driving down cost. This simply means that the bank want to pay an IT worker in India less for the same work carried out in the UK. This disastrous race to the bottom hurts our members and inevitably impacts customers.
“Unite has made it clear that ‘efficiency’ cannot simply mean axing more jobs while expecting the same work to fall on fewer shoulders. The bank forgets that these relentless cuts have a human cost. Unpaid overtime and work-related stress are already at endemic levels across the bank and this will reach a crisis point if Lloyds continue to swing the axe.”
But the bank fought back, saying it was "committed to working through these changes with employees in a careful and sensitive way.
"The group’s policy is always to use natural turnover and to redeploy people wherever possible to retain their expertise and knowledge within the group," the spokesman said. "Where it is necessary for employees to leave the company, it will look to achieve this by offering voluntary redundancy. Compulsory redundancies will always be a last resort."
It comes amid a major shake-up of the entire sector, which is coming under pressure from regulators and a paradigm shift in consumer behaviour. Earlier this month, the IMF called for urgent reforms to be made to European banks' business models, claiming a third would be hit by a profitability crisis.
European firms including Credit Suisse and Deutsche Bank are among those planning to drastically reduce their headcount as they look to cut costs.
Chancellor George Osborne is poised to sell off the remaining nine per cent stake in Lloyds, offering discounted shares to ordinary investors later this year, but has delayed the sale because of market conditions.
Lloyds' share price was up 0.8 per cent in mid-morning trading.