After a 27 billion pound bail out from the British government in 2009, due to bad loans from HBOS and a weak economy in 2008, Lloyds Bank are finally back on their feet and are preparing to pay their dividend to their investors again. In doing so they are willing to cut off 9,000 jobs (10% of workforce) and shut down branches in order to adjust customer’s online banking habits. The number of layoff is so large it could be compared to the 2008 economic crisis, where Lloyds Bank was forced to cut down workers.
There are both advantages and disadvantages in the act of cutting down jobs for the investment of £1 billion on digital technology.
Pros:
- Customer awareness/relationship: Lloyds bank is aware of customers preferred banking habits (online banking), and is establishing a method to meet their customer’s needs.
- Value proposition: Save time and trouble of physically going to the bank, such as, not having to wait in lengthy line ups.
Cons:
- Bad reputation for causing thousands of unemployment
- Poor sustainability and shared values: Effects not only the social environment by causing unemployment, but dismissing and altering their employee’s living condition and current lifestyle
Personally, I do not think it is a wise idea to cut off 9,000 jobs, just to improve the bank’s efficiency, as it can also question Lloyds Bank’s loyalty and ethics for sacrificing so many employees. Yet, of course, it can be argued that due to the competitive nature in the business, it is essential for differentiation.
Read article here:
http://www.bbc.com/news/business-29798532
Works Cited
Ahmed, Kamal. “Lloyds Bank Confirms 9,000 Job Losses and Branch Closures.” BBC News. BBC News, 28 Oct. 2014. Web. <http://www.bbc.com/news/business-29798532>.