Finance
UK's Close Brothers to Cut 600 Jobs by 2027
Published by Global Banking & Finance Review®
Posted on March 17, 2026
2 min readLast updated: March 17, 2026
Quick Summary
Close Brothers plans to cut around 600 jobs by fiscal 2027 amid rising costs from its motor‑finance mis‑selling scandal, increased customer redress provisions, and tighter regulation that have dented earnings.
Close Brothers to cut 20% of workforce as compensation costs weigh on earnings
Close Brothers Faces Job Cuts Amid Financial Pressures
Job Reductions and Workforce Impact
March 17 (Reuters) - British lender Close Brothers will cut around 600 jobs by 2027 - around a fifth of its total workforce - it said on Tuesday, as it grapples with costs stemming from one of the UK's most expensive mis-selling scandals.
Higher provisions linked to compensation for consumers saddled with unfair car loans and the cost of handling customer complaints have weighed on earnings, while tighter regulatory scrutiny has slowed lending growth in the company's motor finance business.
Close Brothers employs approximately 3,000 people across the UK and Ireland.
CEO Statement on Restructuring
"While the impact on affected colleagues is regrettable, these actions are necessary to structurally lower our cost base," said CEO Mike Morgan in a statement, as the lender announced its results.
Financial Results and Provisions
Reported Losses and Provisions
Close Brothers reported a statutory loss before tax of 65.5 million pounds ($87.19 million) in the six months to January 31, reflecting the additional 135-million-pound motor finance provision it took in October.
Restructuring Costs Forecast
It also expects 30 million to 40 million pounds in restructuring costs in fiscal year 2027, higher than its guided range of 10 million to 15 million pounds in 2026.
Market Reaction and Regulatory Scrutiny
Short Seller Allegations
Short seller Viceroy Research said on Monday it had taken a short position in the bank, alleging it "systematically misrepresented" its exposure to the planned redress scheme. Close Brothers said it "strongly disagrees" with Viceroy's report, which sent its shares tumbling 15%.
FCA Compensation Scheme
Britain's Financial Conduct Authority is planning a scheme to compensate millions of consumers given unfair motor loans between 2007 and 2024.
Regulatory Findings and Industry Impact
Regulators found lenders including Close Brothers allowed car dealers to set higher interest rates to increase their commissions, often without clearly disclosing this incentive to customers.
The FCA has estimated the compensation could cost lenders around 11 billion pounds, though two sources told Reuters in December the final amount could end up being nearly double that.
Additional Information
($1 = 0.7513 pounds)
(Reporting by Rishab Shaju in Bengaluru; Editing by Sumana Nandy and Joe Bavier)
Key Takeaways
- •Job cuts part of wider cost‑reduction amid mounting motor finance mis‑selling costs and regulatory scrutiny
- •Provisions for mis‑selling have ballooned—from an initial £165m to possibly up to £300m—pushing Close Brothers into losses
- •Close Brothers is strengthening capital and trimming costs via business exits, asset sales, and efficiency savings
Frequently Asked Questions about UK's Close Brothers to cut 600 jobs by 2027
1Why is Close Brothers cutting 600 jobs by 2027?
Close Brothers is cutting 600 jobs to lower costs amid rising expenses from the motor finance mis-selling issue and increased regulatory scrutiny.
2How has the motor finance mis-selling issue affected Close Brothers?
The motor finance mis-selling issue has led to higher provisions and increased costs for handling customer complaints, which have impacted the company's earnings.
3What are Close Brothers' recent financial results?
Close Brothers reported an interim adjusted operating profit of 65.2 million pounds, down from 80.5 million pounds in the first half of 2025.
4Who commented on the job cuts at Close Brothers?
CEO Mike Morgan stated that the job cuts, though regrettable for affected colleagues, are necessary to structurally lower the company's cost base.
5What has slowed lending growth in Close Brothers' motor finance business?
Tighter regulatory scrutiny has contributed to slower lending growth in the motor finance business.
