Nationalised lender Northern Rock is make around 800 compulsory job cuts as part of its efforts to shrink the business, the firm said.
Following consultation with unions, a further 500 will leave voluntarily, making a total of 1,300 redundancies.
The job cuts relate to previously-announced plans by the Newcastle-based business to cut 2,000 staff by 2011.
The majority of the job losses will come this year. The remaining headcount reductions will occur through natural staff turnover, the company said.
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The group is a major employer in the region and is working with local development agency One NorthEast to help as many as possible to find new jobs.
The company’s executive chairman Ron Sandler said: “Confirming job losses is never easy but our staff have been kept well informed and the need to contract the size of the company is well understood. This remains a very tough time for our staff but the restructure of the company is nearing completion and we are now in the final phase of this difficult process.”
The job cuts come under a restructuring plan for the business first announced in March, which involves cutting back the size of its mortgage business and boosting savings deposits.
The lender was at the centre of the UK’s first bank run for 140 years last September after a funding crisis sparked by the credit crunch. It borrowed almost £27 billion in emergency funding from the Bank of England before being taken into public ownership in February when efforts to sell the business to a private buyer foundered.
As of the end of May, it owed around £24 billion and aims to repay the entire loan by the end of 2010.
Last week Northern Rock announced that Barclays director Gary Hoffman would become its £700,000-a-year chief executive, an appointment which will see Mr Sandler step back from his executive role in the autumn.
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