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| Lloyds says it will cut 5,000 jobs to reduce costs |
| Bloomberg / London Nov 11, 2009, 00:43 IST |
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Lloyds Banking Group Plc, Britain’s biggest mortgage lender, said it plans to cut about 5,000 jobs in its administration, insurance and mortgage units.
The bank will eliminate 2,600 full-time positions and a further 1,000 contractors and temporary workers by the end of next year, Lloyds said in a statement. About 1,400 workers will be redeployed or relocated, the bank said. Lloyds had about 129,000 UK employees at the end of June.
The lender has already announced more than 8,000 job cuts since its January takeover of HBOS Plc, a deal which led it to seek a government bailout. Lloyds follows Royal Bank of Scotland Group Plc and HSBC Holdings Plc in cutting jobs. The two lenders said last week they would eliminate a combined 5,400 positions.
The Lloyds job “losses demonstrate the depth of corporate arrogance within this taxpayer-supported bank,” Rob MacGregor, national officer at the Unite labour union said. “The government cannot afford to continue to look the other way as hard-working families are punished in this manner.”
Lloyds is in the midst of a three-year plan to reduce costs by more than 1.5 billion pounds ($2.5 billion). The lender, which is 43 per cent owned by the government, reported a 3.1 billion-pound loss in the first half.
“There is a lot of overlap with HBOS and Lloyds,” said Irfan Younus, an analyst at NCB Stockbrokers Ltd in London. “There will always be casualties when you go through a significant restructuring.”
Chief Executive Officer Eric Daniels plans to raise 21 billion pounds to avoid the Treasury’s asset insurance plan, which would have given the government a majority stake in the lender. Lloyds is raising 13.5 billion pounds in the UK’s largest rights offer and 7.5 billion pounds in a bond exchange.
The bank will also sell 600 branches, including 164 Cheltenham & Gloucester branches it had earmarked for closure in June, to gain European Union approval for state aid.
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