In its full year results for 2010, the bank reported it remained loss making and that it had entered 2011 with a high retained cost base.
The proposed restructure is intended to improve operational efficiency and to align the total number of employees with the medium term growth expectations of the Company.
It is anticipated that the proposed restructure will result in a reduction of up to 680 jobs, affecting employees at all grades across the organisation by the end of this year.
The Company aims to minimise compulsory redundancies and will offer voluntary redundancy where possible. The Company will also provide support to those employees who are affected.
Ron Sandler, executive chairman, said: "Economic and trading conditions remain very challenging for a bank like Northern Rock; the mortgage market remains subdued, and the low interest rate environment continues to act as a headwind for banks and building societies primarily funded from retail savings.
"In order to meet our agreed objectives, we must continue to manage our cost base, which is too big relative to the size of the Company - regrettably, this will involve job losses. Our aim is to minimise compulsory redundancies where possible and we will offer voluntary redundancy. This is an unsettling time for our employees, who have been through a lot in the last few years. We will keep them well informed throughout the process and provide support to those who are affected."
But the trade unions have reacted with anger. David Fleming, Unite national officer said: "This appalling news of job cuts is scandalous. Another round of brutal job cuts is simply a step too far for this workforce. We are witnessing another move to scale back this already lean organisation, in a desperate bid to find a private buyer.
"The staff at this North-East based company have, since near collapse, faced constant change and turmoil with no clarity about their future. Unite will now take our demand for Northern Rock to be returned to mutuality to political representatives. A mutual Northern Rock is the only viable option to ensure that this company once again becomes the flourishing business it once was. The government must begin to heed the demands for a diverse financial services industry."
