Northern Rock is axing 680 jobs as part of a restructure of the business.
It has entered into a formal consultation with trade union Unite and other employee representatives on the further restructuring of the business.
Northern Rock says the job losses will be spread across all levels of staff and the process will conclude by the end of the year, with staff offered voluntary redundancies where possible.
In January 2010, Northern Rock was split into two parts, a “good” bank, Northern Rock plc and a “bad” bank, Northern Rock Asset Management.
In its full-year results for 2010, Northern Rock plc reported losses of £232m and said keeping control of costs would be a key focus for the coming year. After the latest cuts, Northern Rock plc will have around 2,000 staff, down from around 4,500 when it was established.
Executive chairman Ron Sandler says: “The mortgage market remains subdued and the low interest rate environment continues to act as a headwind for banks and building societies primarily funded from retail savings.
“To meet our agreed objectives, we must continue to manage our cost base, which is too big relative to the size of the company. Regrettably, this will involve job losses.”
Abacus Financial director Matthew Fleming-Duffy says: “We have to accept that the banks are not very lean at the moment. These job losses were always going to have to happen.”