Lloyds announced today that it will be cutting its staff numbers by 15,000 by 2014 as it struggles to save costs. This massive reduction in headcount will help Lloyds save about £1.5 Billion every year. Lloyds has about 105,000 jobs and this announcement means that 1 in every 7 staff will lose their jobs.
Apart from pressures to appease the EU ahead of reform recommendations by the Independent Commission on Banking (ICB) due to be held in September, Lloyds also are desperately trying to avoid being forced to sell more than 630 branches that have been already put for sale. This was to reduce the market dominance of Lloyds banking as both the Government and the EU commission expressed concerns.
New chief executive Antonio Horta-Osorio is clearly determined to change the working structure of the bank and the recent announcement of cuts will have a deep and profound impact.
This yet again goes to show the inefficiencies that got built into the banking system in the UK which never got to light as everyone was busy celebrating and resting on laurels prior to the financial services crash.
Sale of branches, popularly known as Project Verde, has been accelerated by Horta-Osorio and the sale is expected to fetch about £3 Billion. Analysts predict that this will reduce the Lloyds share of current account by nearly 30%, although the ICB is pushing for a further reduction of Lloyds share.
Apart from reducing jobs in the UK, Lloyds will also reduce its international presence to less than 15 countries from its existing 30 by 2014. It is predicted that the impact on UK job losses will be less than 15,000 as closing international operations will have its fair share of job losses too.
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