At the start of the year Northern Rock had a workforce of around 6,000 staff. By the end of the day, this figure will be nearer 4,500.
The troubled lender says further natural turnover is expected in the coming years and the company will ultimately preserve a workforce of around 4,000 staff.
Around 500 of the job losses have been achieved through voluntary redundancy and 800 through compulsory redundancy. It says the majority of those leaving due to redundancy have either already done so, or will leave today.
As a result of the downsize, Northern Rock will seek to sell, or offer for rent, the new office space it is developing at Rainton Bridge near Sunderland and Gosforth, Newcastle upon Tyne.
Northern Rock executive chairman Ron Sandler says: “This has been a very difficult period for the whole company. I would like to pay a special tribute to all of our staff who have maintained high service standards to our customers throughout this difficult time.”