Lloyds Banking Group has unveiled a second round of job cuts, taking the number of reductions it has made since the pandemic began to more than 1,900, in a sign of the pressure coronavirus is piling on retail lenders.
The bank said on Wednesday that about 1,040 positions would be eliminated — primarily in back-office support operations for technology and retail — which would be partially offset by the creation of 340 roles elsewhere in the business.
These come on top of the 865 job losses Lloyds announced in September — then mainly in the insurance and wealth division — that again the bank said were partially offset by 226 new positions. No more branches are being closed.
“These changes reflect our ongoing plans to continue to meet our customers’ changing needs and make parts of our business simpler,” the bank said, adding that most staff affected would not leave until January. “Change does mean making difficult decisions.”
At the outset of the pandemic, most big banks pledged to pause job cuts until the worst was over, hoping for a short period of interruption. As it became clear that Covid-19 would be a longer and more severe crisis, many including Lloyds, HSBC and Deutsche Bank restarted their restructuring programmes.
UK rival NatWest said it would cut more than 500 roles across its branch network in August, while the Co-operative Bank has said it would reduce headcount by 10 per cent and close a quarter of its branches.
“Unite cannot comprehend why Lloyds would choose to cut 1,000 staff who have given the bank such commitment and dedication during a global pandemic,” said Rob MacGregor, Unite national officer, who represents the lender’s staff.
Lloyds slipped to a £602m loss in the first half of the year, mainly due to £3.8bn of charges to cover expected future credit losses related to coronavirus lockdowns.
Despite rebounding to a £1bn profit in the third quarter, as loan provisions dropped and house prices increased, the outlook remains bleak, with the benchmark UK interest rate set to remain at just 0.1 per cent, or even turn negative, for the foreseeable future.
Lloyds estimated in its last annual report that each 25 basis point drop in the base rate would knock almost £150m from its annual net interest income.
Its share price has plunged 53 per cent this year and is one of the worst performers of any UK or European bank.