Virgin Money and Lloyds Banking Group announce more branch closures and job losses

virgin money

More than 2,000 jobs are to be axed at Lloyds Banking Group, Virgin Money and Direct Line Insurance in the latest spate of job losses to hit the financial sector.

In a grim day for traditional retail banking, Virgin said that it was closing 52 branches and was pushing ahead with the rebranding of its Clydesdale Bank and Yorkshire Bank franchises, whose names will disappear from the high street by the end of October.

The bank, which cut 17 branches in May, will reduce its network by another 52 to 166 after the latest closures.

Thirty of the locations earmarked for closure have alternative branches within half a mile, it said, adding that there would be further closures.

The latest moves cut the combined workforce of Virgin, Clydesdale and Yorkshire from 9,500 people at the time of the £1.7 billion merger of Virgin with CYBG in 2018 to 8,500. As well as jobs in branches, there will be redundancies in offices in Leeds, Newcastle and Glasgow.

The names of the Clydesdale and Yorkshire banks, established in 1838 and 1959, respectively, will remain on statements for another 18 months before disappearing completely by October 2021.

Unite, the trade union, said that Lloyds was planning 780 job cuts in its branch network, calling the move “deeply alarming”. The bank confirmed that it was proposing further job cuts, but did not comment on numbers. Lloyds has cut tens of thousands of jobs since its ill-fated takeover of HBOS in 2008 and now employs 63,000 people.

Banks say that closures are necessary because customers are using branches less and are banking online more, but they are leaving some towns with no banks at all, inconveniencing vulnerable people who are not confident with online banking and small businesses, which need cash-handling facilities.

About 55 bank branches are closing a month across the UK, according to Which?, the consumer group.

Branch numbers peaked at 16,900 in 1988 and are estimated to be about 6,000 today.

Direct Line, which has its headquarters in Bromley, said the cuts would affect two of its sites, one of which would close entirely by 2022. It declined to say which sites or roles would be affected.

The insurance firm also blamed digitalisation for its decision, saying customers were increasingly shopping for insurance products online.

A Direct Line spokeswoman said: “Like many companies, we are having to prepare for changes in the way we operate. People are increasingly opting to interact with us digitally. We are therefore proposing a number of changes, which sadly mean the loss of jobs for some of our people.

“These decisions are always really difficult. We take the wellbeing of our people very seriously and have given people as much time as possible to prepare.”

HSBC this week announced that it was closing 27 branches, affecting dozens of staff. The bank is also planning 35,000 separate job cuts across its global workforce, which are expected to have a substantial impact on its UK operations.