Co-op To Axe More Than 1,000 Banking Jobs
The struggling bank will make job cuts amounting to more than 10% of its workforce, Sky News understands.The Co-operative Group is to axe more than 1,000 jobs at its troubled banking arm as part of a complete overhaul of its business and finances.
Sky News understands that the job cuts, which could be detailed as soon as Monday, will account for well over 10% of the Co-operative Bank’s workforce.
The redundancies will underline the human toll of the lender’s mismanagement in recent years as it finalises a plan to fill a £1.5bn hole in its balance sheet.
As expected, the deal, which will have the approval of the Bank of England, will involve Britain’s biggest mutually-owned organisation relinquishing ownership of the Co-op Bank.
Insiders said a decision had yet to be taken about whether the scale of the jobs cull would be made public on Monday by Euan Sutherland, the Co-op Group chief executive.
“It’s unlikely he’ll want to go public with it at this stage,” said one.
The final number was still being decided this weekend but sources said that well over 1,000 of the roughly 9,000 people who work for the mutual’s banking arm were expected to lose their jobs.
The axe will fall principally on those working in the Co-op Bank’s corporate lending business, with a revised strategy focused on retail and small business customers.
Senior managers, led by Niall Booker, the Bank’s chief executive, had also been examining a relaunch of Smile, its internet brand, one insider said.
Retail bondholders are likely to receive a better deal than one presented as a fait accompli by Mr Sutherland until last week.
People close to the deal said that ordinary investors would probably be handed a combination of bonds and a new instrument guaranteeing income.
The biggest institutional bondholders – two US hedge funds – fought to overturn the original deal and will emerge as big shareholders when the bank’s shares are listed on the stock exchange next year.
The news that the Co-op Bank will no longer be majority-owned by the mutual has sparked fury among many customers, prompting the bondholder group to praise the lender’s ethos.
“The Co-Operative Bank is unique for its ethics, mission and heritage which are an essential component of the Bank’s differentiated approach,” LT2 said in a statement last week.
“It is important to us that the Bank will maintain its unique characteristics and ethos.
“The Co-operative Group Ltd. will remain the Bank’s largest shareholder by far and the Bank will benefit by this connection to the Co-operative movement.”