Cuts are coming to Lloyds, according to a number of sources - the FT was first with the news yesterday. As part of a management overhaul led by chief executive Charlie Nunn, some 3000 jobs are at risk. The weakest performing 5% of staff are to be told they'll be made redundant unless their work improves.
At first glance the news looks like management being tough on poor performance in its 63000 workforce. But that might be an illusion. Some might ask why hadn't the Bank already got rid of the the weakest performing 5% of staff. Others report that it was only in this summer that the managers were told to rank staff performance and put poorly performers on improvement plans.
And how tough is 5% really? Famously in the 1980's and 1990's Jack Welch, General Electrics chief executive, popularised in the USA his "vitality curve". That was based on a 20-70-10 system where annually the top 20% of employees were rewarded, 70% were considered adequate, and the bottom 10% were fired.
Looking at the comments on the BBC article many think the move is to help the Bank offshore more jobs to India and replace others with AI. Others report the real cause for the initiative is that staff turnover is down from 15% to 5%.
After cutting 1600 roles in January 2024, earlier this year Lloyds announced plans to close 136 branches across the UK between May 2025 and March 2026. Its also possible this is all happening because the Chief Executive is coming to the final year of his 5-year strategic plan, and needs to show some results to keep his job.
Lloyds Banking Group includes Lloyds Bank, the Halifax Building Society and the Bank of Scotland. One website 4 has reported that transactions at branches in the closure plans have decreased by 48% over the past five years, with 10 million fewer visits reported in 2024 compared to the previous year.
Notes on sources
1. https://www.bbc.co.uk/news/articles/cx209gzg71wo
3. https://www.independent.co.uk/news/business/lloyds-bank-jobs-review-halifax-b2819991.html
4. https://www.retailbankerinternational.com/news/lloyds-staff-overhaul-job-cuts/?cf-view
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