Close Brothers, a banking group, has announced intentions to cut approximately 600 jobs in the United Kingdom and Ireland. These job reductions, disclosed as part of the company’s recent financial report, are set to occur over the next 18 months, impacting nearly a quarter of its current 2,600 employees.
The decision follows Close Brothers’ continued financial challenges, including losses related to the motor finance scandal. The company is preparing for an industry-wide compensation program to address these issues, with an expected allocation of £300 million for driver compensation.
Moreover, Close Brothers reported a loss of £65.5 million in the first half of the year, an improvement from the £102.2 million loss in the previous year. The bank also unveiled plans to slash annual costs by approximately £85 million, with a focus on reducing costs by £25 million in the current fiscal year, followed by an additional £60 million cut in the next financial year, a year ahead of schedule.
To achieve these cost reductions, Close Brothers is implementing various measures, including the adoption of artificial intelligence (AI) and the outsourcing and offshoring of certain operations. CEO Mike Morgan emphasized the necessity of these actions to enhance operational efficiency, customer service, and cost-effectiveness.
He stated, “These strategic measures are crucial for enhancing our operational model, improving scalability, and realizing long-term cost savings. Despite the impact on affected employees, these steps are essential for ensuring our ability to meet customer expectations promptly and efficiently.”
Morgan also highlighted the company’s resilient performance in the first half of the financial year, underlining the focus on sustainable market opportunities and growth in core business segments. Close Brothers aims to position itself for future growth as a specialized banking institution.