Fifth of Lloyds' job cuts to be in Scotland

Published on Tuesday 10 November 2009 21:31

LLOYDS Banking Group said yesterday that 1,000 Scottish jobs will be affected in its plans to axe 5,000 posts across the UK by the end of next year.

The scale of the job losses at the bank, which has been bailed out with billions of pounds of taxpayers' money, angered politicians and union leaders.

The cuts will affect 1,000 positions in Scotland.

The jobs will be lost from offices and branches in the Central Belt, where the majority of the 23,000 people employed by Lloyds in Scotland are based.

Lloyds said it was hoped some of the people affected by the cuts would be redeployed elsewhere in the business.

A proportion of the losses will be met by releasing temporary staff and contractors, leaving an overall reduction of Lloyds permanent staff in Scotland of 500.

Read Bill Jamieson's analysis of this story here

The cuts are to be made to reduce some of the overlap that resulted from the merger of Lloyds with HBOS.

The announcement comes on top of the 6,400 job losses announced by the group earlier this year.

Lloyds said the UK job cuts would fall across the bank's group operations, retail and insurance departments.

This has led to speculation that Scottish Widows, the Edinburgh-based Lloyds insurance subsidiary, would be at the forefront of the cuts.

A Lloyds spokesman refused to comment on the detail of the announcement, but The Scotsman understands that, although some jobs may be lost there, Scottish Widows is unlikely to bear the brunt of the losses.

In insurance, 1,190 roles will be affected across the UK. Of these, about 950 will come from the life, pensions and investments business and 240 from general insurance.

About 250 of the insurance job losses are expected to be achieved through the release of contractors and temporary staff.

According to Lloyds, there will therefore be a net reduction of 940 jobs in the sector. In group operations, 2,820 roles will be affected across Britain.

Of those, 720 will be redeployed. About 750 of the jobs being cut – including about 550 offshore positions in India – are expected to be achieved through the release of contractors and temporary staff. As a result, group operations will see a net reduction of 1,350 jobs.

In the retail department, about 950 roles will be affected within mortgage operations across the UK as the business is consolidated to seven sites.

However, 680 positions will be relocated or redeployed, leaving a net reduction of 270 jobs.

Rob MacGregor, national officer of trade union Unite, said: "This demonstrates the depth of corporate arrogance within this taxpayer-supported bank.

"This country's financial sector should be looking towards the future, rather than continuing to slash jobs without proper consideration of how to rebuild the public's confidence in our tarnished banking sector.

"Today marks the start of another dark week for finance workers.

"It beggars belief that, just days after 5,400 jobs were cut at Royal Bank of Scotland and HSBC, we see further devastation for workers in this part-nationalised financial institution."

Yesterday's announcement was the latest twist in the long-running controversy surrounding the institution since the economic downturn began.

SNP Treasury spokesman Stewart Hosie MP said Prime Minister Gordon Brown and Chancellor Alistair Darling had "sold a con" to the country by pushing through the merger.

He said: "It is now plain to see that Gordon Brown and Alistair Darling sold the country a con with his cut and shut merger of HBOS and Lloyds. Their recent comments on jobs show the emptiness of Labour promises which now look like 'Fewer Jobs for All'."

However a Treasury aide hit back last night, saying: "Stuart Hosie is talking complete rubbish. Had the government not stepped in every job in HBOS would have gone. The bank was bust. Mr Hosie knows that."

Vince Cable, Treasury spokesman for the Liberal Democrats, said: "This announcement is a direct result of Lloyds taking over the poisoned chalice that is HBOS. The takeover was a political decision to avoid total nationalisation, and people are now paying for it with their jobs."

The merger, which was backed by Mr Brown, took place at the height of the banking crisis and was completed in January.

Financial analysts have pinpointed HBOS's reckless lending as one of the main reasons for the difficulties experienced by the merged institution.

The government has already bailed out Lloyds with 17 billion. It is due to invest another 5.7bn under a shareholder cash call announced last week.

The Scottish Labour leader, Iain Gray, said: "Alex Salmond and John Swinney must meet Lloyds and the unions as soon as possible. It is Lloyds' duty to minimise losses and do everything they can to help their people find alternative work and training."

Finance secretary John Swinney said: "This will be an anxious time for the employees affected, and they should be reassured that the Scottish Government is helping wherever we can."

Mark Fisher, group integration director at Lloyds Banking Group, said:

"We will continue to work closely with our colleagues affected by today's announcement to help them through these changes over the coming year."