Lloyds Banking Group is set to warn 3,000 employees that they risk losing their jobs due to underperformance, as part of a management overhaul spearheaded by chief executive Charlie Nunn. The bank has instructed managers to rank staff performance, with about 5% of its 63,000-strong workforce being placed on performance improvement plans. Failure to show significant improvement could lead to dismissal, with around 1,500 staff potentially losing their jobs.
The performance review process, which began in March, targets all staff regardless of seniority. The move comes as the bank grapples with low staff turnover amid economic uncertainty, with fewer than 5% leaving annually compared to a historical average of 15%. Executives are using HR software to monitor progress as they seek to address underperformance.
A Lloyds spokesperson said the initiative aims to embed a high-performance culture within the organisation. “As we build highly skilled teams to move faster forward and deliver great outcomes for our customers, we are striving to embed a high-performance culture,” they said. “We know change can be uncomfortable, but we are excited about the opportunities ahead.”
Ged Nichols, general secretary of the Accord union representing Lloyds workers, noted that the union has not yet seen managers ranking staff but acknowledged an increased focus on performance. “We work hard to support individual members through these processes to help them keep their jobs, and we will continue to do so,” he said. He urged the bank to maintain the integrity of its established performance management procedures, including trade union support.
The overhaul is part of Nunn's final year of a five-year strategic plan to diversify income, push digital and mobile banking, and streamline operations. Lloyds, which owns Halifax and Bank of Scotland, has a history of job cuts, including plans earlier in 2024 to cut 1,600 branch staff and 3,000 roles, while also creating new positions. The bank is also facing a multibillion-pound compensation bill over the car finance commission scandal, having set aside £1.2bn.
