Lloyds Banking Group has announced plans to fire 9,000 employees, around a tenth of its workforce, and to close 150 branches in the next three years, reducing the number to just 2,100. The bank has already reduced the number of staff by 43,000 since 2008.
It has also scrapped its "last bank in town" pledge, under which it promised to keep open branches in towns that don't have any other banks.
What the commentators said
Lloyds' decision shows that "the pressure to automate is irresistible", said the FT's Jonathan Guthrie. With regulators "jacking up capital requirements", the only ways to boost returns on equity is "by swapping people for machines".
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Whether this will go to plan is another matter. "Mechanisation rarely proceeds mechanistically" and "big IT overhauls can crystallise unexpected costs and even fail".
Banks should bear in mind that some people find interacting with computers and automated systems "alienating". Past evidence suggests that people prefer systems that at least offer the option to speak to a human being over those that are online only.
One must have sympathy for those who will be axed, added Phillip Inman in The Guardian. Business leaders "love to exhort Britain's 31 million workers to embrace change", but the fact is that "most people have more interesting lives outside work and need the stability of a safe job to pay the bills".
However, "the pace of change across the UK financial services sector is unprecedented". Adaptation is a necessity, both in finance and across the high street. The only way to preserve jobs is to ensure "staff have more skills, whether it is in marketing or finance and accounting, or the confidence and ability to provide advice".
Andrew is the editor of MoneyWeek magazine. He grew up in Vienna and studied at the University of St Andrews, where he gained a first-class MA in geography & international relations.
After graduating he began to contribute to the foreign page of The Week and soon afterwards joined MoneyWeek at its inception in October 2000. He helped Merryn Somerset Webb establish it as Britain’s best-selling financial magazine, contributing to every section of the publication and specialising in macroeconomics and stockmarkets, before going part-time.
His freelance projects have included a 2009 relaunch of The Pharma Letter, where he covered corporate news and political developments in the German pharmaceuticals market for two years, and a multiyear stint as deputy editor of the Barclays account at Redwood, a marketing agency.
Andrew has been editing MoneyWeek since 2018, and continues to specialise in investment and news in German-speaking countries owing to his fluent command of the language.
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