British state bank Northern Rock says to cut 650 jobs

8th June 2010, Comments 0 comments

British state-owned bank Northern Rock on Tuesday said that it plans to cut up to 650 jobs by the end of 2010 as part of an ongoing restructuring process after a government bailout.

Chief executive Gary Hoffman said it was important that the bank continued "to deliver value for taxpayers.

"There is still a challenging economic environment and, in order to meet our objectives, we must align our staffing level to match the smaller size of the business, increase efficiency and reduce our cost base."

Northern Rock, which employs 4,500 people, was taken into public ownership in early 2008 after it ran into severe funding problems because of the global credit crunch.

The troubled group was plunged into crisis in mid-September 2007 when it was forced to seek emergency help from the Bank of England. That sparked the first rush in a British bank in living memory as customers withdrew cash en masse.

To prevent a wider system meltdown, the government agreed in December 2007 to guarantee all customer deposits held at the struggling group.

© 2010 AFP

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