Northern Rock to axe 680 jobs to 'cut costs'... weeks after paying £13million in bonuses to staff - 28th Mar 2011

Nationalised lender Northern Rock said today that it expects a further 680 job losses by the end of the year as it moves to drive down its costs.

The taxpayer-owned bank, which recently posted an annual loss in 2010, said the cuts are necessary as it tries to return to profit and prepares for a return to private ownership.

But the move comes just weeks after it announced it would pay staff bonuses worth a total of £13.1million despite making a £232million loss.

Northern Rock was nationalised in February 2008 after it collapsed amid the credit crisis, sparking the first run on a UK bank for 150 years.

It employed a workforce of around 6,500 in 2007; this latest announcement reduces the workforce to fewer than 2,000.

The Government split Northern Rock in two at the start of last year, forming a mortgage and savings bank called Northern Rock plc and Northern Rock Asset Management (NRAM) to house the more toxic loans.

Earlier this year, the Government launched a tender for advisers to look at options for Northern Rock plc, including a possible sale. Read More