Lloyds Banking Group plans to axe 15,000 jobs as part of a ferocious cost-cutting exercise aimed at improving its financial condition and performance following a strategic review.The job cuts will principally affect middle managers as the bank aims to bring its top team closer to customers and front line staff, one of four cost saving initiatives identified by the review process.
Lloyds has also opted to reduce the number of suppliers it uses from around 17,000 to under 10,000, and will completely overhaul its processes to reduce its number of IT applications in a bid to deliver £1.5bn of annual savings in 2014.
In a further attempt to strengthen its balance sheet, the bank has also announced plans to reduce its non-core asset portfolio to less than or equal to £90bn by the end of 2014, as it looks to halve this side of its business on the basis that it delivers “below-hurdle” returns, according to a statement contained in the strategic review.
The total cost of the restructuring is estimated at £2.3bn but the bank said the costs savings would free up an additional £2bn for investment for Lloyds’ core operations between 2011-14.
“We have around 30 million customers, iconic brands and high-quality, committed people,” said Antonio Horta-Osorio, chief executive of Lloyd’s. “We will unlock the potential in this franchise over time by creating a simpler, more agile and responsive organisation.”