Northern Rock 'could cut 2,000 jobs'

Crisis-hit mortgage lender Northern Rock could have to cut up to 2,000 jobs after a slowdown in new business, it was reported today.

The possible cuts represent a third of the Newcastle-based group’s 6,000-strong workforce, the Daily Telegraph reports.

The firm, which is drawing up a rescue plan for the business, has no plans for compulsory redundancies but has put in place a recruitment freeze and is trying to agree voluntary departures, according to the report.

Northern Rock, which was not immediately available for comment, was forced to seek emergency funding from the Bank of England in September after soaring borrowing costs, sparking a run on the bank.

The bank, which is estimated to have borrowed more than £20 billion from the Bank of England so far, has reined in its lending following the summer’s credit crunch in financial markets, hitting the growth of the business.