Close Brothers to cut 600 jobs amid car finance scandal
Close Brothers to cut 600 jobs amid car finance scandal
Close Brothers plans job cuts and faster AI rollout as it faces a near-£300m compensation bill from the motor finance mis-selling crisis.
Close Brothers is trimming about 600 roles, nearly a quarter of its workforce, over the next 18 months as it presses ahead with AI-driven automation to cut costs and boost customer service.
The lender aims to reduce costs by £25m in the year to September and by a further £60m in the next financial year, achieving these targets through outsourcing, offshoring, and reducing office space while accelerating automation to improve efficiency and customer experience.
The group posted a pre-tax operating loss of £65.5m for the six months to 31 March after setting aside another £135m for the motor finance mis-selling saga. When added to a previously disclosed £165m provision, the total expected bill is now about £300m to cover costs from the scandal. The Financial Conduct Authority is due to publish the final redress plans by the end of the month and has faced pushback from lenders including Close Brothers, Santander and Lloyds Banking Group over the calculations of consumer losses.
Chief executive Mike Morgan said: “While the impact on affected colleagues is regrettable, these actions are necessary to structurally lower our cost base while increasing our agility and ability to serve our customers.” The bank emphasises the cost reductions and automation rollout as essential steps to stabilise the business and protect customer interests.
The car finance scandal has weighed on the UK lending sector, prompting calls for clearer compensation frameworks and stronger oversight. Close Brothers’ restructuring signals a broader push to streamline operations and return to profitability, even as it navigates ongoing regulatory and customer redress processes.
