Lloyds Bank is planning a significant restructuring of its operations that could see thousands of staff face redundancy. The banking giant is preparing to overhaul its performance management system, with the lowest-performing 3,000 of the company’s 63,000 workforce at risk of losing their positions.
The fresh proposals, according to the Financial Times, represent the concluding stage of chief executive Charlie Nunn’s strategy to reduce expenses and generate additional revenue channels.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: “With [Lloyds’] annual staff turnover at just 5%, versus a more typical 15%, it’s been forced to take a more aggressive approach to weed out the lower performers.
“This seems like sensible business and aligns with the banks quiet push to offshore more roles, aiming to hire 4,000 people in its India tech hub by year-end.
“If it can match peers like Natwest and Barclays on offshoring and branch reductions, the cost improvements could drive meaningful profit upside.”, as reported by City AM.
Lloyds supervisors have been instructed to begin evaluating employee performance, with those falling short to be enrolled in “structured support” programmes, the FT reported.
A spokesperson for Lloyds said: “To achieve the ambitious strategy and deliver brilliant service to customers, we are transforming our business.
“As we build highly-skilled teams to move faster forward and deliver great outcomes for our customers, we are striving to embed a high-performance culture in the organisation.”
The spokesperson said they “continuously look for ways to help our colleagues perform at their best” which are “in line with wider industry practice”.
The added: “We know change can be uncomfortable, but we are excited about the opportunities ahead as we propel forward to achieve our growth ambitions and delivering exceptional customer experiences.”
The proposals come as banking executives throughout the UK look at ways to reduce expenses and enhance shareholder returns.
Alongside Nunn, the leaders of the Big Four banks – Lloyds, Natwest, HSBC and Barclays – are currently engaged in significant cost-reduction initiatives.
HSBC chief Georges Elhedery has outlined an ambitious plan to secure $1.5bn in savings by the end of 2026.
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