Lloyds Banking Group has launched a voluntary redundancy programme, with employees who accept severance packages expected to leave in the first quarter of 2027, as major UK banks accelerate workforce reductions and restructure operations around technology.

According to The Times, the FTSE 100 lender has invited employees across several divisions to register their interest in voluntary severance packages. However, Lloyds is not expected to approve every application, as it seeks to balance staff requests against the operational requirements of the business.

The move follows significant job reductions across the banking sector. Barclays announced in October that it would cut 5,000 roles, representing approximately five per cent of its workforce, while NatWest Group confirmed it had eliminated 1,000 full-time positions during the third quarter – which the bank said contributed towards cost savings of approximately £420 million during the first nine months of the year.

Barclays attributed its reductions to organisational simplification and technology efficiencies driven by artificial intelligence (AI). The bank has been seeking to reduce operating costs, with management identifying technology investment as a key driver of future efficiencies.

Sharon Graham, general secretary of Unite, criticised Barclays' approach, accusing the bank of “using AI as an excuse to discard its loyal and long-suffering workforce”. She said employers should prioritise upgrading employees' skills as technology changes the workplace, rather than taking what she described as a “short-term, kneejerk approach”.

Lloyds has previously committed to investing in employees as part of its response to technological change. In August, the bank announced a £100 million skills development programme, with plans to retrain 20,000 employees to prepare its workforce for changing requirements.

Meanwhile, Santander's acquisition of TSB earlier in 2026 has raised concerns among union representatives about further job reductions. Santander has pledged to deliver £400 million in cost savings following the deal.

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