Co-operative Financial Services (CFS) is to cut its workforce by approximately 1,000 by the end of 2007 as part of a move to slash costs by £100m a year.
The job losses amount to approximately 10% of employees at CFS and come three years after the division made 2,500 staff redundant.
Last year operating profits at CFS fell from £159.3m to £146.2m due to competition from supermarkets and online financial services.
CFS said in a statement: “A number of measures will be taken in order to achieve these cost reductions, but job losses are regrettably un-avoidable. CFS proposes to reduce its workforce by approximately 1,000 during 2007.”
It added: “Other cost savings will be made through improvements in supplier procurement and by simplifying business processes throughout the organisation.”
CFS plans to spend £250m to grow its retail and corporate banking and its insurance operations.
This will include a new website selling general insurance products.
Amicus said it would fight compulsory redundancies.