Northern Rock will make 800 compulsory redundancies over the next five months, the troubled bank announced yesterday afternoon.
There will also be 500 voluntary redundancies as it cuts its workforce by more than a fifth by the end of the year.
A further 700 jobs will then be shed through natural turnover, leaving just 4,000 workers by 2011, under the plan agreed after consultation with trade union Unite.
A 30-day consultation process has begun with staff at risk of redundancy.
Executive chairman Ron Sandler said: “Confirming job losses is never easy, but our staff have been kept well informed, and the need to contract the size of the company is well understood.
“This remains a very tough time for our staff, but the restructure of the company is nearing completion, and we are now in the final phase of this difficult process.”
Northern Rock was nationalised at the beginning of this year after it became short of money due to the credit crunch.
Unite general secretary Derek Simpson pledged in February to oppose any compulsory redundancies at Northern Rock. Unite were yesterday unavailable for comment.