Lloyds Banking Group boss unrepentant after revealing 15,000 job cuts

• Total job cuts now almost 45,000 • Unite condemns ‘deplorable’ action • Strategic review hopes to save £1.5bn a year • Halifax to be revamped and open branches on Saturday António Horta-Osório, the new boss of Lloyds Banking Group, was unrepentant on Thursday after announcing 15,000 job cuts at the bailed out bank in an effort to cut costs and return the bank to financial health. On a bleak day for jobs in the banking industry, HSBC is expected to cut up to 1,000 roles later today. But the City welcomed the cost reductions, and Lloyds was the biggest riser in the FTSE 100 in early trading. The shares started 5% higher at 42p – but still well below the 73.6p at which the taxpayer breaks even on its 41% stake. In the face of a furious reaction from unions, the Portuguese-born banker insisted the cuts were necessary. “We have to do this because this bank has been loss making last year. This bank is also making an after tax loss [in the first quarter] this year,” said Horta-Osorio. Some 28,000 roles have already been axed as result of the rescue of HBOS during the 2008 banking crisis and the new round of reductions was met with shock by unions. This takes the toll of job cuts to almost 45,000 since the deal was finalised in early 2009, when HBOS employed 75,000. “Astonishingly one in eight roles will be lost over the next three years,” said David Fleming, Unite national officer. “The conclusion of this review to make 15,000 staff cuts is yet another extreme example of the financial services industry cutting vital staff in a desperate attempt to create a mirage of acceptability following the financial crisis. But this total failure to take significant action to make appropriate changes to rebuild the public confidence in the sector is deplorable,” he said. Ged Nichols, general secretary of the Accord union, said: “Accord knows that LBG employees are extremely concerned by today’s news, not only what it might mean for them and their workmates, but also the possible effect it may have on customer service.”. Horta-Osório stressed that the bank hires 10,000 staff a year and that he hoped that “national attrition and internal deployment” would help achieve the cuts which are expected to target middle managers and back office staff. Since taking the helm on March, he has embarked upon the strategic review which has resulted in the job cuts announced on Thursday which he hopes will achieve £1.5bn of annual savings in 2014, on top of £2bn of savings achieved through integration. Labour rewrote the competition rules to allow Lloyds to rescue HBOS during the banking crisis and the new management is now facing pressure from the independent banking commission to sell of branches to bolster competition on the high street. But Horta-Osório wants to show that the bank can compete with itself. The Halifax brand is to be revamped and relaunched in September with its “irreverent” attitude of the past and all its branches opened on Saturday. “Our aim is to become the best bank for customers. We have around 30 million customers, iconic brands, including Lloyds TSB, Halifax, Bank of Scotland and Scottish Widows, and high-quality, committed people. We will unlock the potential in this franchise over time by creating a simpler, more agile and responsive organisation, and by making substantial investments in better-value products and services for our customers, to deliver strong, stable and sustainable returns for our shareholders.” The bank will have to spend £2.3bn to achieve the cost cuts, which also includes pulling out of half of the 30 countries where it currently has operations by 2014. It is targeting a return on equity of between 12.5% and 14.5% by 2014 and hopes to start paying a dividend again once the EU ban on such payouts is lifted next year. António Horta-Osório Banking Lloyds Banking Group Job losses Jill Treanor guardian.co.uk

Posted by on June 30, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.