Virgin Money and CYBG are merging into one big bank
They say it'll be a better service, but it could also cost 1,500 people their jobs
Virgin Money is going to be taken over by Clydesdale and Yorkshire Banking Group (CYBG) to create the UK’s ‘first true national competitor to the large, incumbent banks’, they say.
What it means: More $$ for Richard Branson, firstly. Virgin is getting £12m a year from CYBG for the license to use their brand… and because Clydesdale is one of the only banks around the world to issue their own banknotes, rumours are flying we might even see a Branson banknote.
That aside, the merger’s proving controversial with unions because 1,500 people will probably be let go. It’s largely because of a concept called ‘economies of scale’ - the bigger a business is, the lower the proportion of profits they have to spend on costs. The new mega-firm won’t need as many managers or customer-facing roles as the two banks combined have now, for example… which means people lose their jobs.
Unions say workers shouldn’t have found this out just by checking the news this morning, which is one thing - but they’re also worried about customers used to having a branch around the corner who might be disconcerted to find out that many of these are shutting down (in favour of online banking).