Close Brothers, a banking group, has announced its intention to cut approximately 600 jobs in the UK and Ireland. This decision was disclosed today alongside the release of the company’s latest financial results and is set to be implemented over the next 18 months, affecting nearly a quarter of its 2,600 employees.
The job cuts come in the wake of ongoing losses attributed to the motor finance scandal, prompting Close Brothers to allocate £300 million for driver compensation. The group reported a loss of £65.5 million in the first half of the year, a decrease from the previous year’s loss of £102.2 million.
In addition to the workforce reduction, Close Brothers plans to slash annual costs by around £85 million. This cost-saving initiative includes a £25 million reduction in the current fiscal year ending in September, surpassing the original target of £20 million, followed by a further £60 million decrease in the subsequent financial year, a year earlier than initially planned. The company is also implementing cost-cutting strategies such as the integration of artificial intelligence (AI) and the outsourcing and offshoring of certain operations.
Mike Morgan, the Chief Executive, emphasized the necessity of these actions to streamline the company’s cost structure, enhance operational efficiency, and better serve their customers. He highlighted the importance of adapting their operating model to facilitate future scalability and achieve long-term cost efficiencies.
Looking ahead, Morgan expressed confidence in the company’s strategic repositioning and focus on sustainable market opportunities. Despite a marginal reduction in the loan book in the first half of the year, Close Brothers remains optimistic about its growth prospects in the future as a specialized banking group.
