Lloyds, Virgin Money and Direct Line cuts hundreds of jobs

Lloyds, Virgin Money and Direct Line cuts hundreds of jobs

Lloyds, Virgin Money and Direct Line to cut hundreds of jobs

Just a week after announcing a 26% drop in profits, Lloyds Banking Group (LBG) has announced it is shedding the equivalent of 780 full time jobs across its branch network.

Virgin Money – created by the takeover of Virgin Money by the former Clydesdale-Yorkshire Bank last year – has announced the closure of 52 branches with the loss of 500 jobs, blaming customers’ shifting tastes in the way they bank.

Direct Line, which has no shops on the high street, has told staff 800 jobs will go over the next two years and one of its regional offices is to close. Headquartered in Bromley, Kent, it has buildings in Doncaster, Leeds, Manchester, Bristol and Ipswich.

PPI

LBG announced its drop in pre-tax profits to just £4.4 billion after admitting the cost of paying out successful PPI claims over the past year and provisions for the future had cost it £2.45 billion.

Chairman Lord Blackwell said: “Our weak spot continued to be the ongoing legacy from past misconduct, with another significant provision for PPI mis-selling as we approached the deadline for customer compensation claims last August.”

The banking giant has set aside more than £21.87 billion altogether for compensation and administrative costs – almost twice as much as any other bank.

Closure

It had previously announced the closure of 56 branches – 31 Lloyds, 10 Halifax and 15 Bank of Scotland – between April and October, but said the job losses would not mean any additional closures. Roles affected include customer advisors, banking consultants and branch managers.

A spokeswoman said: “As customers are using our branches less often, we are reducing the number of roles across our branch network. This means we can shape our service according to customer behaviour and local demand. Change does mean difficult decisions and we are focused on supporting our colleagues at this time.”

Profits over people

But Scott Doyle of the Unite union said: “The decision by Lloyds Banking Group to cut the equivalent of 780 staff from its branches is yet more evidence of the bank’s profits over people culture.

“The Bank of Scotland, Lloyds and Halifax branches hit by the extensive staff cuts today will have sent shockwaves through the communities which are at present served by highly experienced bank staff.

Unite accepts that banking models constantly change and update, but this doesn’t need to equate to walking away from community banking and the public who have been loyal to the bank.”

Shifting tastes

Virgin Money also blamed the shifting tastes of its customers for the branch closures and job losses. More than half of the losses will come from major offices in Leeds, North East England and Scotland with the remaining 215 coming from a variety of branches across the country.

Spokeswoman Lucy Dines said: “As our customers change the way they want to bank with us, we are evolving the role of our stores – investing in all of the ways that customers are choosing to bank with us.”

CYBG – the former Clydesdale – Yorkshire Bank – has completed its takeover of Virgin Money and has chosen to retain the Virgin name for the new operation.

Cross-section

The 800 jobs to go at Direct Line. The firm said a cross-section of roles would be cut and the redundancies represent about 7% of its workforce.

A spokeswoman for the firm, which owns the Churchill and Green Flag brands, said: “Like many companies we are having to prepare for changes in the way we operate, reflecting changing customer behaviour where people are increasingly opting to interact with us digitally.

We are therefore proposing a number of changes across the business which sadly mean the loss of jobs for some of our people.

Difficult

“These decisions are always really difficult. We take the wellbeing of our people very seriously and have given people as much time as possible to prepare.”

She added that more detail would be given once the staff involved have been informed.

Changing face

The branch closures and job losses are a symptom of the changing face of British banking which has now been going on for several years.

All the big brands have been affected, one of the latest being HSBC which recently announced a massive shake-up with 35,000 job losses across the globe.

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