The Co-operative Bank has announced that it plans to lay off about a tenth of its workforce, or around 400 jobs, in an effort to cut costs.

The bank said it had begun a consultation and restructuring process that would result in a net reduction of 12 percent of jobs across the company.

“Today we announced a number of changes across the bank that are essential to delivering the next phase of the strategic plan,” the Co-operative Bank said.

“This includes commencing consultations on a proposed restructuring of the operating model, which is expected to result in a net reduction of around 400 jobs (12%) across the Bank.

“This decision was not an easy one for us and the bank will continue to work closely with our union and support affected colleagues.”

This came about a month after the company reported that its pre-tax profit had almost halved from £132.6 million in 2022 to £71.4 million the following year.

The decline was attributed to one-off costs, including almost £29 million set aside for compensation to former mortgage customers. Staff costs also rose by a fifth in 2023.

The layoffs will occur across the company, including headquarters, operations and branches, but no store closures are planned as a result.

It is expected that around 200 to 250 people will leave the company. People in other affected functions can apply for other positions within the company.

The consultation phase ends at the beginning of May, then the notice period begins for those affected.

The company said it has tried to “simplify and transform” over the past three years and hopes to achieve “long-term sustainable growth.”

The company has invested £100 million in a new IT system which is nearing completion.

“As the bank enters the next phase of its transformation plan, it will seek to capture the benefits of this investment and take steps to ensure we have the right resources and processes in place to achieve our customer and business objectives,” the bank said.

“That is why the bank has conducted a review to identify opportunities to simplify processes, reduce our cost base and improve efficiency.”

Late last year, the bank announced that it was in “exclusive discussions” with Coventry Building Society about a possible merger between the two companies.