Close Brothers, a banking group, has announced its intention to cut approximately 600 jobs in the United Kingdom and Ireland. The decision, disclosed during the release of the company’s latest financial results, is set to occur over the next 18 months, affecting nearly a quarter of its 2,600 employees.
The job cuts come as Close Brothers faces ongoing losses due to the motor finance scandal, with the implementation of an industry-wide compensation scheme anticipated by the end of the month. The group has earmarked £300 million for driver compensation.
In its recent financial report, Close Brothers reported a loss of £65.5 million in the first half of the year, an improvement from the £102.2 million loss in the previous year. Additionally, the banking group unveiled plans to slash annual costs by around £85 million, with £25 million targeted for the current fiscal year ending in September and an additional £60 million earmarked for the following financial year, a year ahead of schedule.
To achieve these cost reductions, Close Brothers will leverage artificial intelligence (AI) and explore outsourcing and offshoring opportunities. CEO Mike Morgan stated that while the impact on affected employees is unfortunate, these measures are essential to structurally decrease the cost base and enhance operational agility to better serve customers.
Morgan emphasized the importance of these actions in evolving the operating model to support future scalability, improve operational efficiency, and drive long-term savings. Despite a slight reduction in the loan book during the first half of the year, Close Brothers remains optimistic about future growth prospects as a specialized banking entity.
