2,000 jobs face axe

Mar 18 2008 By Adrian Pearson

More than 2,000 jobs at nationalised Newcastle-based mortgage lender Northern Rock are to go, the company has confirmed.

It said "around a third" of its 6,500 jobs will be cut by 2011, with most staff leaving in the first year.

The announcement came as the Newcastle-based group set out its intentions a month after being taken into public ownership.

The lender was forced into an emergency funding bail-out by the Bank of England last September after soaring borrowing costs in the credit crunch.

But it expects to pay back the estimated £24bn in loans from the Bank "over the next three to four years", which will also see an end to Government guarantees over savings.

Northern Rock plans to shrink its assets by around half, boost its deposit base and concentrate on top-quality mortgage lending to maintain its credit quality.

The company said: "The board will be submitting to the Treasury a plan which will set out the basis for the removal of Government support through the creation of a smaller, more focused, financially viable mortgage and savings bank which will be returned to the private sector."

Click here to discuss what the future holds for Northern Rock staff.