Close Brothers, a banking group, has announced intentions to cut approximately 600 jobs in the United Kingdom and Ireland. This decision, disclosed alongside the company’s latest financial results, will be implemented over the next 18 months, affecting nearly a quarter of its 2,600 employees.
The job cuts come in the wake of continued losses for Close Brothers due to the motor finance scandal. The firm is setting aside £300 million for potential compensation to impacted drivers, with details of an industry-wide compensation plan expected soon.
In the first half of the year, Close Brothers reported a loss of £65.5 million, a decrease from the previous year’s loss of £102.2 million. The company also unveiled plans to slash annual costs by approximately £85 million, including a £25 million reduction in the current year, followed by an additional £60 million cut in the next financial year, a year earlier than initially scheduled.
To achieve cost reductions, Close Brothers is implementing various measures, such as leveraging artificial intelligence (AI) technology and outsourcing and offshoring operations. Mike Morgan, the Chief Executive, emphasized the necessity of these actions to streamline the cost base, enhance operational agility, and maintain high levels of customer service.
Morgan stated that these strategic moves mark a crucial shift in the company’s operating model toward future scalability, operational efficiency, and cost savings. Despite a marginal reduction in the loan book in the first half of the year, Close Brothers remains optimistic about growth opportunities in its core markets, positioning itself as a specialized banking group poised for expansion.