Building society axes jobs after rate increase

SKIPTON Building Society is to axe 90 jobs at its head office in Skipton and a satellite centre in Scarborough.

The job losses come just days after the society's controversial decision to raise its mortgage standard variable rate from 3.5 per cent to 4.95 per cent.

Skipton said the two moves are essential to ensure its financial strength in the post-credit crunch environment.

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About 50 jobs will be axed from the society's head office, The Bailey in Skipton, and a further 34 will be cut at Prospect House in Scarborough. In addition, there will be a "handful" of job losses across branches.

The society said it will try to limit the number of compulsory redundancies and those at risk will be offered voluntary redundancy. Twenty new roles will also be created, mostly in customer service.

The job losses represent seven per cent of the society's 1,270 strong workforce. Most of the cuts will be in head office support functions, including IT.

The society's union, SURGE, said it was disappointed but understood the business rationale.

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Skipton's chief executive David Cutter said: "Regrettably some tough decisions are required in order to ensure our business is in the best possible shape to face the future and to grasp opportunities – hence today's announcement of redundancies soon after our planned standard variable rate increase.

"'We understand the impact of these decisions on our members and our staff and we have not made them lightly. However, we hope both our members and our staff will understand that, as a responsible business, we must be pragmatic and do what is necessary to position our business for the long term best interests of all our members."

Other changes include the merger of the society's two branches in Leeds at the Bond Street site. The group said its annual results, due out on February 24, will show "a substantial increase in group profitability".