Lloyds Banking Group to cut 14 per cent of workforce
Move is part of a strategy to create annual savings of £1.5bn.
Lloyds Banking Group has announced a cut of 14 per cent of its work force, as part of a new company strategy seeking to create an annual savings of £1.5bn by 2014.
Since merging with HBOS in 2009, Lloyds has already reported 27,500 job cuts.
The bank doesn't plan to close any UK branches, instead focusing the cuts on middle management and back office functions.
The company's review comes with a guarantee of "better end-to-end processes and IT platforms, a de-layered management structure and simpler legal structure, [and] centralised support functions".
People seem to support the strategy, as Lloyds's share price rose 9 per cent on the London Stock Exchange on Thursday morning. This was the biggest increase in the FTSE 100.
The plan was initiated by the bank's new chief executive, Antonio Horta-Osorio. The former Santander executive joined the Lloyds team on 1 March.
"He wants to do as much of [the job cuts] through redeployment and natural attrition as redundancies, but there are bound to be redundancies," said Robert Peston, the BBC's business editor. "They want to bring top management closer to branch management - so there's a whole swathe of managers for whom that is incredibly bad news."
Another 15,000 of Lloyds Banking Group's 104,000 employees will fall victim to the job cuts.
The programme itself will cost £2.3bn, but it is expected to produce £2bn for investments between the current year and 2014.
Much of the savings will come from Lloyds' international operations, as the bank plans to leave 15 of the 30 countries in which it provides services.
Lloyds plans to use the money to "revitalise Halifax" and develop its UK businesses, including Bank of Scotland, Cheltenham & Gloucester, Birmingham Midshires and Intelligent Finance.
"Our aim is to become the best bank for customers," Horta-Osorio 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."
Horta-Osorio has also promised to turn Lloyds into a self-sufficient bank without a reliance on government funding.
The Unite union isn't joining in backing the plan and believes it will cause "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," Unite national officer David Fleming said.