September 20 2014 Latest news:
By annabelle dickson Business writer
Friday, July 20, 2012
Virgin Money staff in Norwich have been told they could lose their jobs unless they move to Newcastle or Edinburgh.
When the Virgin Money Northern Rock “747” deal was announced last year assurances were immediately given that it would not have an impact on the existing Norwich operation.
Sir Richard Branson during his UK tour to launch the new bank, including to Norwich in January, spoke of his optimism that the Norwich base would expand with the business - although he was a big cagey about figures.
Six months on and 30 loyal employees look like they are facing the agonising dilemma to move their lives north, or take redundancy.
From a purely business point of view, it does make sense to have HR, finance and IT operations in one place. With 1,200 Northern Rock staff in Newcastle, it was probably inevitable such departments - were they to merge - would go north rather than south.
But is this the start of a wholesale shift north? There is no reason to believe the rest will follow. There is a great deal of talent in Norwich - including the creative team who launched the latest Virgin Money advertisements. The company is keen to emphasise its commitment to Norwich. Let’s hope Sir Richard’s fondness for the Norfolk roots stands firm.
About 30 staff in the company’s human resources, finance and IT departments in Norwich have been offered the move, which will result in a reduction of staff in Norwich.
Where staff do not decide to take up the offer of relocation they could be made redundant.
The decision by Virgin Money comes six months Sir Richard Branson visited Norwich to launched the new Virgin Money bank after buying the taxpayer bailed out Northern Rock for £747m.
He said during the launch in January that he said expected the bank’s workforce to expand, including in Norwich.
But as a result of the integration, staff numbers in Norwich will fall from 250 to 215.
A spokesman for Virgin Money said: “As part of the process of integration we have reviewed the way in which we are organised, across all of our main locations, to minimise duplication and ensure the bank is managed in the most efficient and effective way possible. “We are consulting on the relocation of about 30 roles from our Norwich office into our Gosforth (Newcastle) and Edinburgh locations, as part of the process to consolidate several service functions. As part of this we will consult with the employee forum about our intention to offer all those affected a relocation package and the opportunity to relocate to Newcastle or Edinburgh.
He added: “We are committed to minimising job losses by offering relocation to the relevant operational site in all cases. Where colleagues do not take up the offer of relocation we will offer them the option of accepting a redundancy package.”
But he said that Norwich remained a very important part of the business, with the marketing and a large part of the IT department in Norfolk, it was still a significant centre.
In its recent results Virgin Money’s pre-tax profits dropped 20pc to £23.5m following the acquisition of the state-owned bank from the tax payer for £747m last year.
But the annual report showed that excluding acquisition costs and “impaired goodwill” as a result of the takeover, its underlying like-for-like profits increased 41pc to £44.2m in 2011.
The company started in Norwich in 1994 after a deal was struck with Norwich Union to create Virgin Direct.
Many of the 2,100 employees which Virgin Money acquired as a result of the takeover are based in Newcastle.
Virgin Money had long been keen to get a foot in the door of the high street and the first of a new high street ‘lounge’ outlets opened in Norwich last year.
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