Lloyds staff warning notices will reach around 3,000 workers as the bank begins its most aggressive performance overhaul in years. Chief executive Charlie Nunn is pushing the plan as he enters the final year of his five-year strategy.
Over the summer, managers started ranking employees. Consequently, about 5% of the 63,000-strong workforce will be placed on performance plans. Staff on these plans must show rapid improvement or risk dismissal. Although many employees will likely keep their jobs, up to 1,500 could face termination.
Executives argue that the review is necessary. In recent years, fewer than 5% of staff have left annually, compared with a historic average of 15%. Therefore, the bank wants to increase turnover among underperformers. Moreover, Nunn’s wider strategy seeks to diversify Lloyds’ income, strengthen digital services, and streamline operations.
A Lloyds spokesperson explained that the move supports efforts to embed a “high-performance culture.” They added: “As we build highly skilled teams to deliver great outcomes, we strive to help colleagues perform at their best. We know change can be uncomfortable, but we are excited about the opportunities ahead.”
Meanwhile, the Accord union raised concerns. General secretary Ged Nichols stressed that managers have not yet been asked to rank workers. However, he confirmed the union continues to support members on structured performance plans. Additionally, he called on Lloyds to maintain fair processes that allow union representation.
This wave of scrutiny follows earlier cuts. In January 2024, Lloyds reduced its branch workforce by 1,600 and cut 3,000 wider roles. At the same time, the bank claimed it was creating thousands of new jobs in digital banking and asset management, suggesting a net workforce increase.
Furthermore, Lloyds has introduced flexible branch use across its brands. Customers can now access services at Halifax, Lloyds, or Bank of Scotland branches interchangeably. Although the move improves access, it has raised fears of closures and further job losses. The bank also hired hundreds of IT engineers in India, fueling speculation about future UK redundancies.
Nunn must also prepare for a potential multibillion-pound payout linked to the car finance commission scandal. Lloyds has already set aside £1.2 billion to cover claims from drivers allegedly overcharged through dealer commission deals dating back to 2007.
Despite the uncertainty, investors appear reassured. Shares in Lloyds rose nearly 1% after news of the performance overhaul, showing confidence in Nunn’s decisive approach.
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