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14 April 2024

Virgin says would have to cut jobs at Northern Rock

By Agencies


Richard Branson's Virgin Group said on Wednesday it could not promise not to cut jobs at Northern Rock if it ends up taking over the embattled mortgage lender, abandoning an earlier commitment to not lay off workers.

Jayne-Anne Gadhia, the head of Virgin Money who would run the bank if Branson's bid is successful, said the government's financing plan for Northern Rock made job losses likely.

"We can't continue to make the promise that there will be no redundancies, but we would aim very much to minimise any reductions," she told BBC radio.

"The government financing plan means that anybody that's taking the bank forward needs to think very carefully about how quickly they can repay the taxpayer.

"We are very confident that we can make full payment to the taxpayer within three years, and part of the solution to that .. is reducing the size of the bank going forward," she said. Virgin and an in-house management team both pitched rescue offers for Northern Rock this week. The government is keen on a private-sector solution after a four-month crisis has added to a fall in Prime Minister Gordon Brown's popularity.

A third potential suitor, investment firm Olivant, quit the race on Monday. (Reuters)