Santander slashes workforce amidst profit decline and automation strategy
- Santander UK has cut over 2,000 jobs as part of a cost-cutting strategy and to improve efficiencies.
- The bank reported a 5 percent drop in pre-tax profits, totaling £764 million for the first half of 2025.
- These measures reflect the bank's goal to streamline operations and enhance its position in the market.
In the UK, Santander has executed significant workforce reductions as part of an ongoing cost-cutting initiative. This has resulted in the loss of over 2,000 jobs coinciding with a reported 5 percent decline in half-year pre-tax profits, which reached £764 million for the first six months of 2025. Santander has been implementing a 'simplification and automation' strategy expected to enhance cost efficiencies for the upcoming year. The recent job cuts follow a previous announcement in October 2024, where the bank announced plans to cut over 1,400 roles within its UK operations. Additionally, uncertainties surrounding the Financial Conduct Authority's proposed compensation scheme indicate that further job losses may occur in the near future, putting approximately 750 more positions at risk. Accompanying these changes, the bank is also planning to close 95 branches and reduce operating hours at around 50 locations to streamline its operations. Santander, headquartered in the UK, is bracing for an upcoming Supreme Court ruling about a car finance commission scandal that could greatly affect its financial standing. The bank has already set aside a £295 million provision in 2024 to address potential compensation claims related to the scandal. Depending on the Supreme Court's judgment, this provision could require adjustment, and the ultimate financial impact on the bank might evolve, emphasizing the uncertainty surrounding the decision. Mike Regnier, CEO of Santander, highlighted the recent acquisition of TSB from Sabadell as a strategy to bolster the bank's transformation. He expressed confidence that this acquisition would enhance customer offerings and allow increased investments in innovative products. Regnier affirmed that the acquisition aligns with the bank's commitment to become the leading provider of banking services in the UK through advancements in technology and efficiency improvements. While the transition from TSB is anticipated to conclude in early 2026, the bank remains focused on maintaining a healthy mortgage loan balance, which stood at £167.2 billion during the first half of the year. Despite the current challenges, Santander is optimistic about achieving a gradual return to net mortgage lending in 2025, as they report a positive outlook heading into the second half of the year. The recent job cuts, branch closures, and changes to business strategies reflect Santander UK's commitment to restructuring in order to enhance operational efficiency and competitiveness in a challenging financial landscape. The bank's ability to adapt and navigate regulatory challenges while investing in technology will likely determine its success in the rapidly evolving banking sector. As Santander braces for the Supreme Court ruling and continues to implement significant changes, the financial landscape for both the bank and its customers remains dynamic and uncertain.