Northern Rock is to axe 1,300 jobs as part of its efforts to shrink the business, the firm has said.

The nationalised lender will make around 800 compulsory job cuts and following consultation with unions, a further 500 will leave voluntarily, making a total of 1,300 redundancies.

The job cuts relate to previously-announced plans by the Newcastle-based business to cut 2,000 staff by 2011.

One week ago, Northern Rock announced the appointment of Barclays director Gary Hoffman as its £700,000-a-year chief executive.

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