150 jobs to go at Newcastle Building Society
By Peter McCusker
NEWCASTLE Building Society yesterday announced 150 redundancies on Tyneside and more jobs may go – despite strenuous efforts to win more business.
The Newcastle’s decision stems, in part, from the closure of Icelandic internet bank Icesave following the collapse of its parent company Landsbanki last autumn. But the deepening recession which has led to a 50% fall in mortgage lending has also impacted on the business.
The society, which has 1,300 employees, says although it hopes to secure redundancies through voluntary means, it fears there may be a "large number of compulsory" departures.
None of the staff in the Newcastle’s 35 North East branches and a 36th in Gibraltar will be affected by the job cuts.
Newcastle Building Society chief executive Colin Seccombe said: "We are desperately sad to say that we have got to make 150 people redundant. However, even when this process is complete we still have 5% more staff than we did 12 months ago."
David Isbell, Unite regional officer, said: "Staff at Newcastle Building Society will be devastated to hear the news following the announcement by Nissan. This ends a dark week for workers across the North East.
"Unite has demanded a meeting with the Newcastle Building Society in order to obtain clarification on the implications of this decision. Staff now face a weekend of anxiety. The priority of the union is to avoid any compulsory job losses.
"The society owes it to their staff and their customers to ensure they do not make knee-jerk decisions at the expense of the experienced and dedicated workforce."
In late 2007, the Newcastle announced it was creating 500 jobs, and with almost all of these jobs being created in its Strategic Solutions division, which performs back-office functions for other finance companies. It famously placed advertising for new staff around the corner from Northern Rock’s Regent Centre offices. By the end of 2007, it had taken on 200 new staff and Strategic Solutions now employs 600 people.
But the collapse of Icesave means there is no longer the work available for the 100 staff working on this account.
Mr Seccombe added: "We are looking for volunteers, although there is likely to be a large number of compulsory redundancies.
"Unfortunately, we are having to shed jobs across departments including residential and commercial lending and head office services, such as finance, training and human resources.
"I would like to think that this is the beginning and the end of any job losses but in such a volatile and fast-changing economic world, it is impossible to say that. However, we are actively working on securing additional contracts for our Strategic Solutions division and we remain hopeful of picking up further work."
The jobs are being shed at both the Newcastle head office in New Bridge Street and its new offices at Cobalt Business Park.
Three weeks ago the Newcastle warned it could lose £43m it had invested in Icelandic bank Landesbanki. Mr Seccombe said the redundancies were not related to this potential loss of money, but the loss of work had affected 100 posts.
Source: Journal Live