Northern Rock to Slash 680 Jobs

Northern Rock, which has been one of the top five mortgage lenders in the United Kingdom in terms of gross lending, has planned to cut 680 jobs as part of its additional restructuring.

 

Employees would be affected due to job losses. The scope would be to all grades nationwide.

 

Although the nationalized bank was making progress, it still suffered from huge loss of £232.4m last year.

 

According to Ron Sandler, executive chairman of the group, the company’s cost cut to meet agreed objectives would result in job losses. However, compulsory redundancies are to be minimized.

 

During the credit crisis caused by the US subprime mortgage financial crisis in 2007, Northern Rock plc had had to approach the Bank of England for a loan facility. It was nationalized as a result of two unsuccessful bids to acquire the bank to save it from collapse.

 

Since January 2010, the Northern Rock name has split into two parts, assets and banking (Northern Rock Plc and Northern Rock (Asset Management) Plc). The former holds savers’ deposits and new mortgages while the latter holds the rescued banks’ old mortgages and unsecured loans. Each company has its own boards of directors.

 

The sale of the bank and other plans could turn the Northern Rock back into a building society.

 

Prior to the credit crisis, the combined banks employed about 6,500. At the time of establishment last year, Northern Rock PLC’s workforce was about 4,500. It has recently announced to reduce its workforce to fewer than 2,000 people.

 

The Northern Rock is nestled at the Regent Centre in Gosforth, Newcastle upon Tyne. The Gosforth-based bank has customer contact centre operations at its head office and Doxford International Business Park.

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