Lloyds Banking Group is to axe a further 15,000 jobs in a bid to make annual savings of £1.5 billion by 2014, with most of the cuts likely to come from middle management and back office functions.
The organisation has already announced 27,500 job losses since its merger with HBOS in 2009, but said it did not intend to close any UK branches. Instead as part of a long awaited strategic review, it promised to create “better end-to-end processes and IT platforms, a de-layered management structure and simpler legal structure, [and] centralised support functions”.
Much of the savings will come from halving its international presence, which means that it will operate in only 15 countries within three years. The part-nationalised group, which includes retail banks Lloyds TSB, Halifax, Bank of Scotland and insurance firm Scottish Widows, also aims to reduce the number of suppliers it uses, which will inevitably have a knock-on effect elsewhere in the market.
New chief executive Antonio Horta-Osorio, who joined Lloyds’ board in January from Santander UK and started the top job on 1 March, said: “We will unlock the potential in this franchise over time by creating a simpler, more agile and responsive organisation, and by making substantial investments in better value products and services for our customers to deliver strong, stable and sustainable returns for our shareholders.”
The cost-cutting programme, which will cost a total of £2.3 billion, is expected to free up about £2 billion between 2011 and 2014 that the group intends to invest in order to “revitalise Halifax” and develop its other businesses.
Horta-Osorio, who launched the strategic review shortly after becoming chief executive, has already shaken up the management team since his arrival, with the departure of two board members.
But David Fleming, a national officer at the Unite union, told the BBC that the outcome of his review would cause staff “deep distress and anxiety”. “This review is merely another box-ticking exercise to give this bank – which has already, since its creation two years ago, cut over 27,000 staff – an excuse to sack more employees,” he said.
