Fears that Lloyds Banking Group is preparing to announce up to 9,000 job cuts – more than one in 10 of the workforce – swept the industry last night as António Horta-Osório put the finishing touches to a three-year plan for the bailed-out bank.
Some 45,000 roles have already been axed since Lloyds TSB rescued HBOS during the 2008 banking crisis – 30,000 were lost as a result of the deal and a further 15,000 earmarked by Horta-Osório after he took the helm in March 2011 as part of cost cuts.
Horta-Osório is expected to blame the latest round of cuts to the 85,000-strong workforce on the move by customers towards using branches less and the internet more, meaning the bank has been forced to become more digitally focused.
Branches are also expected to be closed to respond to what bankers say is falling demand for high street outlets.
Lloyds, which is 24% owned by the taxpayer, would not comment on the scale of the job cuts, reported on Sky ahead of the announcement on Tuesday, when the bank will also publish its third quarter results.
Ged Nichols, general secretary of the Accord union said: “If this story is correct, it will create further anxiety for a workforce that has been reduced by around 40% already in a little over five years. The bank is supposed to be trying to rebuild trust and confidence with its customers and employees. This isn’t the way to do it.
“We are seeking urgent talks with Lloyds Banking Group about this issue. The loyal, hardworking and often low paid employees of Lloyds Banking Group deserve better.”
The board of the bank, originally bailed out with £20bn of government money, is expected to meet on Monday to ratify the new strategic direction drawn up Horta-Osório, when a final decision on the scale of the job reductions will be made.
That will come after the results of a health check of 100 banks across the EU – including the major UK banks – are published on Sunday by the European Banking Authority, a move that could result in some banks being forced to raise more capital or sell off operations to preserve their capital cushions.
There were reports that one in 10 banks subjected to the stress tests could fail, prompting the European Central Bank to try to dampen speculation.
“Any inferences drawn as to the final outcome of the exercise would be highly speculative until the results are final on 26 October,” a spokesman for the ECB told Reuters.
All the UK’s major banks are due to publish their results for the third quarter in the next fortnight.
Barclays announced 19,000 job cuts in May as a result of a scaling back of its investment banking division and has already blamed the need to automate services for job cuts in branches. After Antony Jenkins was first promoted to chief executive at Barclays he is said to have told investors that he could envisage a total of 40,000 fewer staff – taking the workforce to 100,000 – as a result of the impact of new technology.
The government has been selling down its stake in Lloyds – it stood at over 40% after the bailout – but has now ruled any further reductions before next year’s general election.
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