Lloyds Banking Group is to warn 3,000 staff that they are at risk of being sacked for underperformance, as part of a management overhaul led by chief executive Charlie Nunn.
Bosses have been instructed to rank staff performance, with about 5% of its 63,000-strong workforce due to be put on performance plans that will put their jobs at risk unless they notably improve. About 1,500 of those put on notice could end up losing their jobs.
Executives – who will monitor progress via HR software – are trying to address low turnover among its lowest performers, with staff having been less likely to leave their jobs amid ongoing economic uncertainty. Fewer than 5% of Lloyds staff are understood to be leaving the group each year, which is below the 15% historical average.
It comes as Nunn enters the final year of his five-year strategic plan, which is meant to diversify income, push more customers towards digital and mobile banking, and generally tighten up the sprawling business.
Commenting on the potential job cuts, a Lloyds spokesperson said the moves were part of efforts to “embed a high-performance culture in the organisation”.
“As we build highly skilled teams to move faster forward and deliver great outcomes for our customers, we are striving to embed a high-performance culture in the organisation. To achieve this, and in line with wider industry practice, we continuously look for ways to help our colleagues perform at their best.
“We know change can be uncomfortable, but we are excited about the opportunities ahead as we propel forward to achieve our growth ambitions and delivering exceptional customer experiences.”
Ged Nichols, the general secretary of the Accord union that represents Lloyds workers, said the union had not heard of any managers having yet been asked to start ranking staff.
“There has been an increased focus on performance in Lloyds Banking Group this year with more use of the structured support plans to help individuals who may be falling short of their performance objectives,” he said. “We work hard to support individual members through these processes to help them to keep their jobs and we’ll continue to do so.”
Nichols added: “We’re asking Lloyds Banking Group to reassure its staff that it will continue to uphold the integrity of the established performance management processes including the arrangements for individuals to be supported by their trade union.”
Lloyds – which also owns the Halifax and Bank of Scotland brands – is well known for sweeping job cuts, which have again accelerated as part of Nunn’s strategic plan.
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In January 2024, Lloyds Bank revealed plans to cut 1,600 staff from its branch network, just months after confirming it would be slashing 3,000 roles from the wider business, including middle management. The bank said at the time that it was simultaneously creating thousands of new positions that would ultimately result in a net increase in its workforce, as part of its broader shift to digital banking and asset management,
Earlier this year, Lloyds also started letting customers use any of its brands’ branches, regardless of which lender they held accounts with, raising concerns of site closures and job cuts. Lloyds also started hiring hundreds of IT engineers in India this year, prompting speculation it could start cutting more roles in the UK.
Nunn is also having to steel the business for a multibillion-pound compensation bill over the car finance commission scandal, which involved drivers being overcharged via controversial commission arrangements between lenders and car dealers as far back as 2007. Lloyds has already put aside £1.2bn for potential compensation.
Shares in Lloyds were up nearly 1% on Thursday morning after news of the management overhaul, which was first reported by the Financial Times.