Northern Rock Reveals Job Cuts

Northern Rock is set to shed up to 1,300 jobs as part of a restructuring plan.

The troubled bank, which was effectively nationalised this year, aims to limit the number of compulsory redundancies to 800, while 500 staff will leave voluntarily.

The job cuts are in line with previously announced plans to cut 2,000 staff by 2011.

The plans also involve cutting back the size of its mortgage business and boosting savings deposits.

The Newcastle-based business expects to be left with an estimated 4,000 staff.

It is expected that the majority of job losses will come this year.

The group will work with local development agency One NorthEast to help as many as possible find new jobs.

Northern Rock's Executive Chairman Ron Sandler said: "Confirming job losses is never easy but our staff have been kept well informed and the need to contract the size of the company is well understood.

"This remains a very tough time for our staff but the restructure of the company is nearing completion and we are now in the final phase of this difficult process."

The North East Chamber of Commerce said it is "disappointing news" but that "there are other job opportunities in the region".

The Newcastle Building Society has recently announced plans to recruit another 250 staff.

Last September, the lender became a victim of the credit crunch and borrowed £27 million in emergency funding from the Bank of England before being taken into public ownership in February.

At the end of May, the bank owed around £24 billion and hopes to repay the entire loan by the end of 2010.

Last week, the bank appointed Gary Hoffman as new Chief Executive Officer, effective from 1 October 2008.

Mr Sandler said the appointment was a "major step forward" for Northern Rock.

(DS)