Lloyds accused of 'death by a thousand cuts' as it axes 1,340 jobs

Unions criticise fresh round of redundancies as bank trims staff to make savings

Lloyds Banking Group has been accused of a strategy of “death by a thousand cuts” after announcing another 1,340 job losses.

The redundancies, which will affect staff in branches, are part of an ongoing programme of reductions by the bailed out bank’s chief executive, António Horta-Osório.

“We know the outlook for banks is tough due to record low interest rates, falling revenues and the changes in technology and customer behaviours. This ‘death by a thousand cuts’ approach does nothing to give confidence to those who will be staying with the business, trying their best to meet customers’ needs and help to sustain the group for the future,” said Ged Nichols, general secretary of the union Accord.

Officials at Unite branded the job losses “horrific”. The latest cuts are part of the 9,000 reduction programme announced by Horta-Osório in 2014, and will have an impact on staff who work in Lloyds, Halifax and Bank of Scotland.

The toll on jobs has been heavy at Lloyds since the 2008 rescue of HBOS. That takeover led to 45,000 jobs cuts, which was followed by Horta-Osório’s 9,000 cost cutting programme. He announced another 3,000 job cuts in July, in the immediate aftermath of the Brexit vote.

Unions hope the cuts announced on Wednesday can be achieved voluntarily. Nichols, who will be meeting Horta-Osório next month, said his members needed a vision of their future inside the bank.

“We’re deeply concerned that both the scale and the pace of job reductions are increasing,” said Nichols.

Rob MacGregor, Unite national officer said: “These announcements to staff across Lloyds Banking Group are horrific news for staff. 1,340 job losses within this taxpayer-backed institution are wholly unacceptable.”

The latest cuts come as the chancellor, Philip Hammond, prepares to sell the remaining 9% stake in Lloyds at a price below the 73.6p per share paid by taxpayers, taking 43% stake at the height of the banking crisis.

Lloyds said: “This process involves taking difficult decisions, and we are committed to working through these changes in a careful and sensitive way. All affected employees have been briefed by their line manager today.” The bank said it would aim to avoid compulsory redundancies. It said it was creating 110 new roles and argued the number of roles being lost was 1,230.

Last week Hammond said he was abandoning plans to offer shares to the public – the plan outlined by his predecessor, George Osborne – and pressing on with selling shares on the stock market to major City investors. The shares are trading at 53p although the Treasury has insisted that it will not make a loss on the latest sell off as it has raised about £16.9bn from previous sales.

Banks are finding it more difficult to make profits because of the low interest rate environment which narrows the gap between what they can charge borrowers and need to pay savers.