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Northern Rock announces 650 job cuts

Northern Rock, the taxpayer owned banking operation, has today revealed plans to cut 650 jobs by the end of 2010. It is hoped that there will be no compulsory redundancies required and the 650 job losses will consist mainly of those leaving the group or entering retirement. However, unions believe that the final number of job losses in this particular phase will top 990 a figure which is nearly double that announced today.

The unions also believe the company is looking at pension fund arrangements for existing staff with the intention of reducing liabilities for the company going forward. Northern Rock is just one of many companies now looking at pension fund liabilities in the future as deficits continue to grow and liabilities continue to place pressure upon balance sheets. So far Northern Rock has reduced the number of staff working for the company by around 2,000 since the recession hit home with around 4,500 remaining with the company.

In many ways Northern Rock is in a no-win situation, with taxpayers looking for costs to be reduced and profits to be increased while unions are looking to protect the employment positions of their members. At some point in the future it is highly likely that Northern Rock will be sold on with taxpayers hopefully receiving some kind of repayment at that stage.

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