Close Brothers, a banking group, has announced intentions to cut approximately 600 jobs across the UK and Ireland. These job reductions were disclosed today alongside the company’s latest financial results and are scheduled to occur over the next 18 months, impacting nearly a quarter of its workforce of 2,600 employees.
The decision to downsize comes in light of ongoing losses related to the motor finance scandal, with Close Brothers setting aside £300 million for compensating affected drivers. The company 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.
Additionally, Close Brothers revealed plans to trim annual costs by around £85 million, including a £25 million reduction in the current fiscal year and a further £60 million decrease in the following year, a year earlier than initially planned. Cost-cutting initiatives also involve implementing artificial intelligence (AI) and transferring some operations offshore.
Mike Morgan, the Chief Executive, emphasized the necessity of these measures to enhance operational efficiency and better serve customers. He highlighted the importance of adapting the operating model to drive future scalability and achieve cost savings in the long term, positioning the company for sustained growth as a specialized banking entity.
The company aims to focus on markets with strong growth prospects while ensuring operational improvements to enhance service delivery and financial performance. Close Brothers remains optimistic about its future prospects as it continues to evolve its business model to meet evolving market demands.