New Lloyds CEO cuts 15,000 jobs in revival plan
London, June 30, 2011
Lloyds will axe 15,000 jobs and halve its international presence, a plan its new boss hopes will save 1.5 billion pounds ($2.4 billion) a year by 2014 and return the part-nationalised British bank back to health.
Chief executive Antonio Horta-Osorio, presenting his overhaul of the bank on Thursday after 122 days in charge, aims to cut through middle management and make the bank simpler and more agile.
"We have to do this. The bank has lost money and is losing money as you saw in Q1 and we have to get this bank back on its feet to support the UK economy and to get it profitable in order to pay taxpayers' money back," he told reporters on a conference call.
The latest cuts for Lloyds, Europe's seventh biggest bank by market value, will add to 27,000 job losses already since the 2008 financial crisis. Lloyds currently employs some 103,000 staff.
The cost of the programme will be 2.3 billion pounds, but the savings garnered will allow the bank to invest an extra 2 billion pounds in its core retail banking activities.
Horta-Osorio will cut Lloyds' international presence to fewer than 15 countries by 2014 from 30 now in order to focus more on its core UK retail banking business - where it is market leader and has historically been far more significant than its overseas reach.
Lloyds' overseas presence currently includes operations in Europe, such as Holland, Germany and Spain, both north and south America and Asia. Horta-Osorio, a respected Portuguese banker whom Lloyds poached from rival Santander UK , declined to say which countries Lloyds would leave.
The Unite trade union group attacked the job cuts, but Horta-Osorio said the move was a necessary one. HSBC and banks in Italy, Switzerland and the United States have also announced job cuts this week as regulatory pressures and slow economies weigh heavily.
Lloyds shares rose sharply as analysts and investors welcomed Horta-Osorio's plans. By 1015 GMT the stock was up 8.2 percent at 48.32 pence, the best-performing UK blue-chip stock and lifting its market value to over 33 billion pounds.
"This looks like third time lucky for UK banks' strategy days -- Lloyds has delivered solid targets with some key milestones," said Mike Trippitt, analyst at Oriel Securities. - Reuters