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Lloyds, Virgin Money and Direct Line to cut 2,000 jobs

Kalyeena Makortoff Banking correspondent
Photograph: Toby Melville/Reuters

More than 2,000 jobs are to be axed at Lloyds Banking Group, Virgin Money and Direct Line Insurance in the latest spate of job losses to hit the financial sector.

Lloyds said it was cutting about 780 roles across its branch network, which represents almost one in 16 of its branch-based workforce, according to the staff union Accord. In total, Lloyds employs about 70,000 staff.

Virgin Money – which owns the soon to be rebranded Clydesdale and Yorkshire Bank sites – is to lose 500 roles and close 52 branches.

At the same time, Direct Line Insurance confirmed that it was also cutting 800 jobs from its 11,000-strong workforce as it embarked on a £60m cost-cutting drive.

Related: HSBC to close 27 more branches across UK this year

The Lloyds move is expected to affect customer advisers, banking consultants and bank managers at its Lloyds Bank and Halifax sites. Managers at its Bank of Scotland branches will also face cuts. The job losses are expected to be completed by October, although no branches are expected to close.

The announcement comes days after the bank reported a 26% fall in annual profits to £4.4bn and confirmed that it was cutting its group bonus pool for the first time in four years.

Lloyds blamed the decision on changing consumer behaviour and increased use of digital banking. A spokeswoman said: “As customers are using our branches less often, we are reducing the number of roles across our branch network. This means we can shape our service according to customer behaviour and local demand. Change does mean difficult decisions and we are focused on supporting our colleagues at this time.”

Unions hit out at the decision, with Unite claiming it was “yet more evidence of the bank’s profits-over-people culture”.

The union said: “Unite accepts that banking models constantly change and update, but this doesn’t need to equate to walking away from community banking and the public who have been loyal to the bank.”

Virgin Money’s cuts will affect 215 branch staff, while 285 jobs will be lost from offices in Glasgow, Leeds, Norwich and Gosforth, across departments including business banking, risk and finance.

It is part of plans to shut 22 branches and merge a further 30 with other sites less than a mile away. The lender said it was meant to avoid “duplication”, having seen its branch network expand following CYBG’s £1.7bn takeover of Virgin Money in 2018. It will bring its branch network down to 166 sites by September.

The 500 total job cuts are part of the 1,500 job losses first revealed when CYBG revealed the Virgin Money deal. The lender employs 9,000 workers.

Direct Line, which has its headquarters in Bromley, said the cuts would affect two of its sites, one of which would close entirely by 2022. It declined to say which sites or roles would be affected.

The insurance firm also blamed digitalisation for its decision, saying customers were increasingly shopping for insurance products online.

A Direct Line spokeswoman said: “Like many companies, we are having to prepare for changes in the way we operate. People are increasingly opting to interact with us digitally. We are therefore proposing a number of changes, which sadly mean the loss of jobs for some of our people.

“These decisions are always really difficult. We take the wellbeing of our people very seriously and have given people as much time as possible to prepare.”

HSBC this week announced that it was closing 27 branches, affecting dozens of staff. The bank is also planning 35,000 separate job cuts across its global workforce, which are expected to have a substantial impact on its UK operations.