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| Northern Rock jobs under threat | Northern Rock jobs under threat |
| (about 2 hours later) | |
| Jobs at Northern Rock will be cut if Virgin Group ends up controlling the troubled bank, the BBC has learned. | Jobs at Northern Rock will be cut if Virgin Group ends up controlling the troubled bank, the BBC has learned. |
| Virgin has abandoned its commitment to no job cuts because government-backed bonds to be issued by Northern Rock have to be repaid within three years. | Virgin has abandoned its commitment to no job cuts because government-backed bonds to be issued by Northern Rock have to be repaid within three years. |
| Employee numbers would probably come down from 6,000 to about 5,000, says BBC business editor Robert Peston. | Employee numbers would probably come down from 6,000 to about 5,000, says BBC business editor Robert Peston. |
| The tight deadline is thought to have ruled investment fund Olivant out of the race to control the Newcastle firm. | The tight deadline is thought to have ruled investment fund Olivant out of the race to control the Newcastle firm. |
| Sir Richard Branson had previously said that he was confident there would be no redundancies under a Virgin rescue. | Sir Richard Branson had previously said that he was confident there would be no redundancies under a Virgin rescue. |
| But Virgin Money boss Jayne-Anne Ghadia, who would run Northern Rock in the event a Virgin rescue was accepted by the Treasury, has told the BBC that job losses would be greater than originally anticipated. | But Virgin Money boss Jayne-Anne Ghadia, who would run Northern Rock in the event a Virgin rescue was accepted by the Treasury, has told the BBC that job losses would be greater than originally anticipated. |
| The chancellor has decided that the priority is speedy repayment of all those taxpayer loans, even if it means job losses Robert Peston, BBC business editor | The chancellor has decided that the priority is speedy repayment of all those taxpayer loans, even if it means job losses Robert Peston, BBC business editor |
| She won't put a number on it, but employee numbers would probably come down from 6,000 to about 5,000, the BBC's business editor Robert Peston said. | She won't put a number on it, but employee numbers would probably come down from 6,000 to about 5,000, the BBC's business editor Robert Peston said. |
| He added: "The government may be embarrassed by her disclosure that job losses would stem from financial conditions imposed by the Treasury." | He added: "The government may be embarrassed by her disclosure that job losses would stem from financial conditions imposed by the Treasury." |
| Loan repayment | Loan repayment |
| On Friday, the government told all potential rescuers that up to £40bn of Treasury-backed bonds to be issued by Northern Rock would have to be repaid in between one and three years. | |
| In order to do that, Mr Peston suggested, any rescuer - including Virgin - would have to massively shrink the size of Virgin's mortgage book from more than £100bn to about £60bn. | In order to do that, Mr Peston suggested, any rescuer - including Virgin - would have to massively shrink the size of Virgin's mortgage book from more than £100bn to about £60bn. |
| The smaller the business, the fewer people it would need to service its mortgages. | The smaller the business, the fewer people it would need to service its mortgages. |
| "In other words, the chancellor has decided that the priority is speedy repayment of all those taxpayer loans, even if it means job losses in Newcastle," Mr Peston said. | "In other words, the chancellor has decided that the priority is speedy repayment of all those taxpayer loans, even if it means job losses in Newcastle," Mr Peston said. |
| Northern Rock is a key employer in the North East and job losses could prompt a further backlash over the government's handling of the crisis at the bank. | Northern Rock is a key employer in the North East and job losses could prompt a further backlash over the government's handling of the crisis at the bank. |