Lloyds Banking Group, the UK’s biggest domestic bank, is rolling out a tough performance review that puts about 3,000 employees at risk of losing their jobs.
This affects roughly 5% of its 63,000 workers, from branch staff to top execs. The move aims to build a “high-performance culture” in a sluggish economy where staff aren’t leaving as often as before.
Under the plan, managers will flag underperformers and put them on “structured support” programs. These last a few months, with clear goals tracked via HR software.
If workers don’t improve, they could be sacked. Sources say around 1,500 might end up out the door, though Lloyds isn’t targeting a fixed number of cuts. The bank stresses this is about helping people step up, not just firing them.
Staff turnover has dropped to under 5% a year, way below the old average of 15%. With fewer people quitting due to economic worries, like high inflation and job market jitters. CEO Charlie Nunn, in his final year of a five-year strategy, wants to boost productivity, push digital banking, and cut costs.
This isn’t Lloyds‘ first round of changes. In January 2024, it axed 1,600 branch jobs while adding roles in digital areas. Earlier cuts hit 3,000 positions as the bank shifts from old-school branches to apps and online services. It’s also hiring IT pros in India, aiming for 4,000 by year-end, which could mean more UK roles moving overseas.
Unions aren’t happy. Accord, which reps over 21,000 Lloyds and TSB staff, wants guarantees that the process stays fair and includes union support. Ged Nichols, Accord’s general secretary, said there’s more focus on performance this year, and the union will help members navigate it. The BTU union called it a “numbers game” that could hound people out, warning of low morale.
Matt Britzman from Hargreaves Lansdown says it’s an aggressive step to cull low performers, similar to what rivals like NatWest do. It could save money and lift profits, especially with offshoring.
But critics worry it’s harsh in tough times, with Lloyds facing a big bill from a car finance scandal—already £1.2 billion set aside, and more could come.
Lloyds owns Halifax and Bank of Scotland, serving millions. Shares rose 1% after the news broke, showing investors like the efficiency push. A spokesperson said: “We’re striving to embed a high-performance culture and support colleagues to perform at their best.”
This echoes old-school tactics like GE’s “rank and yank,” where bottom performers get cut yearly. For Lloyds, it’s about staying competitive in a digital world. Staff now face pressure to up their game or risk the boot. As the economy wobbles, more banks might follow suit.
The overhaul is separate from a June 2025 misconduct case where Lloyds clawed back £3 million in bonuses from ex-staff tied to old scandals. Watch for updates as unions push back and the bank rolls out changes.
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