Lloyds Banking Group (LBG) — parent firm of Bank of Scotland, Scottish Widows and Halifax — is to cut 1,600 staff from its branch network in a corporate overhaul as it tries to reduce costs and encourage customers to use digital services.

As part of the overhaul, LBG will simultaneously create 830 jobs in its “relationship growth” team to provide services across branches, video meetings and over the phone, causing an overall reduction of about 769 jobs.

A Lloyds spokesperson said: “As more customers choose to manage their day-to-day banking online, it is important our people are available when it matters most.

“We are introducing a number of new roles and making changes to our branch teams so our customers can see us how and when they want to.”

Accord Union, which represents many Lloyds Banking Group staff, said: “LBG announced significant changes to its branch network structure and ways of working, which it says are necessary because of changes in customer behaviour.

“These changes have seen the bank move over 21 million customers to banking digitally or on their mobile. It says that with customers choosing to use branches less and less, the shape of their branch network has continued to shrink in line with customer demand.

“From April 2024, customer facing Community Banking staff will focus on supporting customers with their banking needs using digital first and a newly created Relationship Growth team will focus on growing the bank through increased sales to existing customers and referrals to other parts of the Group.

“The aim is to get all customers using digital first although the bank accepts that not all customers have the tools or the appetite to switch. Helping these customers and those in difficult/vulnerable situations will remain part of the service provided in branch.

“This new Relationship Growth team is made up of Relationship Managers (RMs) who’ll meet with customers through video appointments, telephony or in branch and will be supported by Relationship Growth Coaches focussed on increasing sales. The Relationship Growth team will not be involved in the day-to-day branch operations …

“The business is reducing the existing 20 areas to form 10 regions, with 5 in Lloyds Bank, 1 in Bank of Scotland and 4 in Halifax. In addition, the size of most pools will increase leading to fewer numbers across the UK. Area Director Groups will become Regional Director Groups.

“There will be no compulsory role reductions at grades A and B, although grade B colleagues can express an interest in voluntary redundancy. Changes to management structures will mean there will be redundancies at grade C and above. The aim is to achieve most of these reductions through voluntary redundancy.

“Grade A customer service colleagues will become Customer Support colleagues at the same grade. There are no role reductions.

“Colleagues performing Grade B Assistant Branch Manager, High Cash, Banking Consultant and Relationship Consultant roles will have the choice of remaining in Community Bank in a Customer Support role at grade B, or they can apply for one of the 700 new Relationship Manager roles at grade C. They also can express interest in voluntary redundancy (although this is not guaranteed).

“All other grades will be assessed for roles using the established selection process or will be able to express an interest in a new role or VR.”