Virgin Money to cut 31 branches and 112 jobs

Glasgow-headquartered Virgin Money has announced plans to close another 31 branches, including 12 in Scotland, as it “accelerate its digital strategy, enabling greater efficiency.”

When Clydesdale Bank merged with Virgin Money in 2018, the group had a combined total of 245 branches — but that will fall to 131 after the latest closures.

The bank said “some colleagues will be at risk of redundancy” with a likely reduction of around 112 full time equivalent roles across the group.

Unite the union said Virgin Money “has abandoned all social responsibility with these proposed closures” and that it will be raising the plan “as a matter of urgency” with the Scottish Government.

“As Virgin Money UK comes to the end of its Integration and Transformation programmes, the group is accelerating the next phase of its strategy and increasing the level of investment in digital initiatives,” said Virgin Money.

“As a result, restructuring charges for FY21 are now expected to be c.£145m in total with an additional c.£45m booked in Q4, as the group launches the initial actions in order to deliver on its strategic ambition to be the UK’s best digital bank.”

The banking group added: “Virgin Money regularly reviews the ways customers use its stores, as well as its online, mobile and telephone channels, so that it can adapt its services to meet changing customer demand.

“The number of customers using bank branches for day-to-day transactions has been on a downward trajectory across the UK banking industry for a number of years, and this has been further accelerated by the pandemic.

“The decision to close a store is based on a number of factors, including location, usage, proximity to alternative stores and lease arrangements.

“Each store was assessed on an individual basis, with careful consideration of the impact on the local area, as well as the needs of vulnerable customers and the accessibility of alternative services such as free-to-use ATMs and Post Offices.

“Customers can use Post Offices for day‐to-day banking, including cash deposits and withdrawals, cheque deposits and balance enquiries, as well as coin exchange …

“28 of the 30 customer stores closing are located less than a third of a mile away from the nearest Post Office.

“Of the other two stores, one is 0.7 miles away from a Post Office and the other is 2.7 miles from the nearest alternative Virgin Money store.

“The customer stores will close in early 2022.

“It is Virgin Money’s intention to find alternative roles for colleagues wherever possible, either within other stores locally or elsewhere in the group.

“However, some colleagues will be at risk of redundancy.

“It is expected that the changes will result in a reduction of around 112 full time equivalent roles across the group.”

Unite the union reacted with anger over the proposed closures and said Scotland is being “disproportionately’” hit.

The union said the 12 branches in Scotland earmarked for closure are Airdrie, Banchory, Broughty Ferry, Cumbernauld, East Kilbride, Galashiels, Milngavie, Musselburgh, Oban, Portree, Stenhousemuir and Wick.

“It is estimated that around 76 employees in Scotland are likely to be made redundant due to branch location, and the lack of suitable transfer alternatives nearby,” said Unite.

“In England, a further 19 branches are being proposed for closure including Ashton-under-Lyne, Beverley, Blackburn, Chesterfield, Grantham, Keighley, Nelson, Northallerton, Nuneaton, Grantham, Leeds (Horsforth), Leeds (White Rose), Lincoln, Macclesfield, Mexborough, Selby, Sheffield (Meadowhall), and Whitby.

“The Virgin Group also proposes to merge two stores in Newcastle into one flagship store located on Northumberland Street from June 2022.

“Unite estimates that across England and Scotland around 132 workers are likely to face compulsory redundancy due to location, and the lack of redeployment opportunities.

“The proposed closures come as the Virgin Group is completing the process of rebranding the former Clydesdale branches with new signs alongside the mobile banking app.

“In 2018, Virgin Money acquired the Clydesdale and Yorkshire Bank Group (CYBG) in a £1.7 billion takeover which Unite warned at the time could result in a 16 per cent reduction in the combined workforce.

“Unite is the only recognised trade union within Virgin Money, with the banking group having an estimated workforce of around 7,800.”

Debbie Hutchings, Unite industrial officer, said: “The proposed closure of 12 Virgin Money branches across Scotland is not only shameful but bizarre as the group has just about completed the rebranding exercise of the former Clydesdale branches.

“The announcement will disproportionately impact on workers and communities across Scotland, and it is here where the Virgin Group axe will fall the hardest.

“Island communities from Portree to rural towns such as Wick are going to be left behind by Virgin Money.

“Our nation’s town centres from Cumbernauld to Musselburgh will be further hollowed out as fewer people will come into town if there is no bank branch.

“This will directly hit the businesses that remain on the high street.

“The Virgin Money Group claim the principal reason for the closures is down to its digital banking drive.

“However, what happens to the people in our Island and Highland communities where internet reception is notoriously poor not to mention the difficulties which many people have in using mobile app technology.

“The Virgin Group has abandoned all social responsibility with these proposed closures, and they are completely disregarding the damaging effects that these closures will have on thousands of customers.

“We are calling on politicians in the areas affected to work with us to save these branches, and Unite will be raising this as a matter of urgency with the Scottish Government.”

About the Author

Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.