IT workers at Halifax Bank of Scotland (HBOS) face the job axe again this morning after the UK’s largest mortgage lender was thrown a £12.2bn lifeline from Lloyds TSB.
Reports have suggested that up to 40,000 people at the bank could lose their jobs once the shock merger between the two companies completes.
Lloyds chief executive Eric Daniels - who has spent the past 48 hours banging out a rescue plan for HBOS - was quick to dismiss that number. However, he added that the bank would be looking to save £1bn a year in costs.
HBOS' head of media relations Mark Elliot told The Register that it was “way too early to speculate because everything has happened so fast.” He said there were “all sorts of questions flying around about jobs. But right now we’re stuck between a rock and a hard place.”
Elliot was unable to tell us if more of the 2,000-strong UK-based IT workforce at HBOS, which saw first half profits tumble 72 per cent to £848m in July, could lose their jobs following the merger.
Just last month HBOS said it planned to slash around 100 IT jobs as part of a cost-cutting exercise aimed at reducing duplication between mortgage brands.
As it stands the bank plans to axe up to five per cent of IT employees in what it described in August as a “phased approach”. The cull was expected to complete by the end of the year.
In July HBOS ominously told IT contractor staff to take a 10 per cent pay cut or work out their notice and leave by 10 August. That was a move viewed by many as the first warning sign that the bank was in serious trouble.
Unite deputy general secretary Graham Goddard called for "urgent talks at the highest level with the banks," and added that the union would "not accept any compulsory redundancies as a result of this merger".
He blamed the "corporate greed of large institutions" for bringing "the financial market to its knees. The major job losses in the sector are fundamentally caused by precarious investments and transactions by bankers pursuing large rewards. Staff working in the financial services must not pay the price for corporate greed."
It is understood that the Bank of England, the Financial Services Authority and the Treasury have worked hard behind the scenes to ensure that Lloyds struck a deal with HBOS.
Prime Minister Gordon Brown has reportedly spoken to Lloyds chairman Sir Victor Blank who described the merger as "a unique opportunity to accelerate and extend our strategy and create the UK's leading financial services group." ®