Lloyds is set to make a reshuffle, putting around 2,500 jobs at risk 

Britain”s biggest high-street bank, Lloyds, is set to begin furloughs next week as a cost-cutting measure. According to Reuters, around 2500 people may be affected, and about 120 new jobs will be created by the reshuffle. The company started taking measures in that direction, asking the employees, such as analysts and product managers, to go through a rigorous test process, which may be held next week.

“We are evolving and transforming our business to ensure we can do more for our customers and deliver the products and services they need,” a Lloyds spokesperson said, adding the bank was reviewing how teams worked without elaborating on potential cuts.

The move has come amid reports that Lloyds” rival Barclays is planning to cut as many as 2,000 jobs as a cost-cutting measure, which would enable them to save up to 1 billion pounds ($1.25 billion). Most U.K. banks are currently running profitably with increased loan distribution following the hike in interest rates. However, being afraid of defaults, investors are suggesting cost-cutting measures, the report said.

The interest rate in the U.K. has reached 5.25% from 0.1% in December 2021, which is the largest hike since 1994. The Bank of England”s Monetary Policy Committee (MPC) has been hiking the interest rate in order to curb inflation, which reached a 40-year high of 11.1% in October 2022. However, following the rate hike, inflation has dipped to 6.7 in September 2023.

The MPC still holds a hawkish stand on inflation, signaling further in the coming months. The next MPC meeting is scheduled for December 14–15, 2023.