Lloyds Banking Group is shedding 1,250 jobs as it cuts costs and changes the way it sells insurance products in its branches.
The cutbacks – described as devastating news by union officials – are the latest to take place at the 24% taxpayer-owned bank, which has already cut 45,000 roles since rescuing HBOS in 2008.
António Horta-Osório, the bank’s boss, warned last month that he would be cutting another 9,000 jobs and shutting 200 branches in an attempt to make the business more profitable. The latest cuts are the first tranche and will hit staff involved in selling critical illness and income protection products across the UK.
“The bank’s announcement of its intention to cease the sale of standalone protection products through its bancassurance sales force is devastating news for all concerned and comes after many years of pruning and cutting staff numbers in an attempt to make this business area profitable,” the Accord union said.
Some of the employees work out of Halifax, Lloyds and Bank of Scotland branches but the bank said they would also go from its finance, risk and operations areas. It said the cuts were necessary because of falling customer demand for the products.
“As a result of significantly reduced customer demand, these products will no longer be available on a stand-alone basis. We will continue to offer protection as part of the mortgage sales process,” the bank said.
According to the union, 427 of the roles will be lost at Halifax and 105 at Bank of Scotland.
The union quoted the bank as saying: “Due to the nature of the roles impacted, there are no immediate suitable alternatives for colleagues, however colleagues will be fully supported in line with the group principles, policies and best practices, including outplacement support and given the significant challenges with internal redeployment, we will actively seek to support colleagues.”
The bank said more than 90% of the jobs lost since 2011 had been managed through redeployment, voluntary redundancy or not replacing people who resigned.
“The group’s policy is always to use natural turnover and to redeploy people wherever possible to retain their expertise and knowledge within the group. Where it is necessary for employees to leave the company, it will look to achieve this by offering voluntary redundancy. Compulsory redundancies will always be a last resort,” the bank said.
The bank told staff that sales of such products are driven by “trigger points” in customer lives and that it was no longer economical to have a dedicated network of advisers selling critical illness and income protection products.
The union said staff would go through a ”1:1 process to determine if they wish to remain with the group or to leave on enhanced voluntary severance terms”.
The union added that it had taken legal advice about changes to pay schemes introduced by Lloyds since it was fined £28m in 2013 for putting staff under pressure to sell products.