Northern Rock reveals plans to slash 650 jobs ahead of planned privatisation

NATIONALISED lender Northern Rock plans to cut up to 650 jobs, or 14 per cent of its staff, by the end of the year, as it presses ahead with an overhaul of the bank to prepare for a return to private ownership.

Northern Rock, Britain’s first major casualty of the credit crunch, yesterday said it was aligning the size of its staff with a now much reduced business. The bank is now writing one-fifth of the mortgage business it did then. The cuts will affect jobs across the bank, which currently employs some 4,500 people.

Northern Rock also plans to close its final salary pension scheme, with current members being offered membership in the money-purchase section of the scheme, where investment risk is borne by the employee. It expects terms there to be improved.

“We remain in public ownership and it is important that we continue to deliver value for taxpayers,” chief executive Gary Hoffman said. “There is still a challenging economic environment and in order to meet our objectives, we must align our staffing level to match the smaller size of the business.”