Co-op Bank announces plans to cut 12pc of workforce

26th Mar 2024 11:32

(Sharecast News) - The Co-operative Bank announced plans to slash 400 jobs on Tuesday, or about 12% of its current 3,000-strong workforce, in a bid to streamline operations and reduce costs.

According to the Guardian, the move would be the bank's most significant restructuring since its bailout by hedge funds in 2017.

The job cuts would impact a number of its divisions, including personnel at its 50 branches, as the bank emphasised that the decision was unrelated to ongoing discussions regarding a potential takeover by Coventry Building Society, under negotiation since November.

Recent financial reports revealed a substantial decline in annual profits, plummeting to £71.4m for 2023, primarily due to one-off expenses.

The bank incurred £29m in costs related to a redress scheme aimed at compensating mortgage customers affected by adjustments to its standard variable mortgage rate in 2011 and 2012.

It framed the cuts as part of its ongoing transformation strategy, which has been underway for the past three years and was seeking to simplify operations and foster sustainable growth, with substantial investments, including £100m allocated to a new IT infrastructure.

In a statement, the bank outlined the necessity of the changes for the execution of its strategic plan, acknowledging the challenging nature of the decision and pledging to collaborate closely with trade unions to support affected employees.

Affected staff had entered a consultation period, set to end by 7 May, with the transition expected to be completed by the end of August.

Reporting by Josh White for Sharecast.com.