Northern Rock to cut 650 jobs by year end

Nationalised bank Northern Rock has said it plans to cut 650 jobs by the end of this year as part of its ongoing restructuring process.

It has pledged to avoid compulsory redundancies "wherever possible".

Chief executive Gary Hoffman said the bank had to "align our staffing level to match the smaller size of the business".

The Unite union claims the number of jobs cut will be 990, in addition to the 2,000 already lost since 2008.

Northern Rock refuted the 990 figure, saying that related to the number of roles affected. After redeployment, the number of people losing their jobs would be 650, a spokesperson maintained.

Unite called the decision to cut staff "devastating".

"The decision by Northern Rock management to cut over 20% of its workforce and alter the pensions of the remaining staff is devastating," said Unite naitonal officer Rob MacGregor.

"Such massive changes represent a total reappraisal of the service the bank provides to it's customers."

Northern Rock defended the decision: "We remain in public ownership and it is important that we continue to deliver value for taxpayers."

Mr Hoffman said that the firm would work with local agencies to provide support to those affected by the redundancies.

Northern Rock also announced plans to close its final salary pension scheme to new contributions. The scheme, which has 850 members, was closed to new entrants in 1999.

Members will be offered access to the company's money purchase scheme instead, the terms of which will be improved, the bank said.

Northern Rock currently employs about 4,500 people.

The collapse of the Northern Rock in the autumn of 2007 signalled the onset of the banking crisis.