Page last updated at 14:02 GMT, Wednesday, 30 July 2008 15:02 UK

Northern Rock unveils job losses

Northern Rock clock in Newcastle
Northern Rock was one of the biggest employers in the region

Northern Rock has announced that it expects to make about 1,300 staff redundant - fewer than expected - as part of its restructuring plans.

It hopes to limit the number of compulsory redundancies to 800, while 500 staff will leave voluntarily.

The bank said it expects to be left with an estimated 4,000 staff.

Northern Rock was nationalised at the beginning of this year after it was hit by a shortage of funds as a result of the credit crunch.

We are pleased it is not the 2,000 job cuts that had previously been talked about
Graham Goddard, deputy general secretary, Unite union

"Confirming job losses is never easy," said Northern Rock's executive chairman Ron Sandler.

"This remains a very tough time for our staff but the restructuring of the company is nearing completion and we are now in the final phase of this difficult process," he said.

Opportunities

The bank had previously said it intended to cut up to 2,000 staff by 2011. It had been one of the biggest employers in the north-east of England with a workforce of 6,500.

The Unite union said it was disappointed that there had to be any compulsory redundancies. "But on a positive note, we are pleased it is not the 2,000 job cuts that had previously been talked about," said Unite deputy general secretary Graham Goddard.

The announcement came at the end of a consultation process between Northern Rock and staff representatives.

The North East Chamber of Commerce said it was disappointing news but asserted that there were other job opportunities in the region, particularly in the banking sector.

"The Newcastle Building Society announced plans to recruit another 250 staff and there are employers in the financial sector aware of the Northern Rock situation that are looking to take on more people," a spokesperson for the chamber said.

Last September, a lack of liquidity in the money markets forced Northern Rock to go to the Bank of England for emergency funding. Savers withdrew millions of pounds from the bank in the following few days - the first run on a British bank for more than a century.




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