Lloyds to Tell Thousands of Staff They Are Among Weakest 5% and Face Redundancy Risk

Lloyds Banking Group has told about 3,000 employees that they are among the weakest-performing 5% of staff and face the risk of redundancy unless their work improves, the bank and union sources said. The group expects roughly 1,500 roles to be lost as a result of the performance review, according to reporting by BBC News.

The policy applies across the organisation, from branch employees to senior directors, and is part of a wider performance-management shake-up at the bank. Lloyds said the measure forms part of efforts to "embed a high-performance culture" and to help colleagues "perform at their best." The bank added that it recognises change can be uncomfortable but framed the work as necessary for achieving its growth ambitions and delivering improved customer experiences.

A spokesperson for Lloyds said the firm continuously looks for ways to support colleagues and that the approach is "in line with wider industry practice." The firm has previously reduced headcount in recent years: it cut around 1,600 roles in January last year and has run further redundancy rounds since, as it adapts to shifting customer behaviour and seeks to control costs.

The Communication Workers Union's Banking and Financial Services branch, which represents some Lloyds staff, criticised the move, warning that employees could be "hounded out of the business" by the new performance thresholds. The union said it raised concerns about the clarity and fairness of the review process and the potential impact on staff morale.

Lloyds said those identified as underperforming will be given opportunities to improve before any final decisions on redundancy are made. The bank did not provide a detailed timeline for the reviews or for any subsequent cuts when asked in public statements.

Analysts say banks have been tightening performance management in recent years as they respond to margin pressure, regulatory scrutiny and the need to invest in digital services, though Lloyds framed the current action as part of routine performance management and cultural change rather than a pure cost-cutting exercise.

Employees affected by the reviews will learn their status as Lloyds moves forward with the programme. The bank has indicated it will continue to balance workforce adjustments with efforts to support staff development and to meet customer service goals as it implements the new performance framework.