Northern Rock, the UK mortgage lender that was nationalised in February after a financial crisis has started consultations with unions and staff over plans to cut 2,000 jobs this year.
Announcing the start of formal talks with Unite and other staff unions, Northern Rock said "the majority" of the previously-announced job cuts will be carried out this year, with remainder to take place by the end of 2011.
The job reduction programme will affect about a third of the bank's 6,000-strong workforce.
"In order to meet our previously stated corporate objectives, it is necessary for us to contract to a smaller and more sustainable business. Regrettably, this is likely to involve a reduction in current staffing," Northern Rock chairman Ron Sandler said in a statement.
"This is a very difficult time for our people and we will continue to work closely with them and Unite to minimise the extent and impact of potential job losses."
Northern Rock, once the UK's eighth-biggest bank by market value, was forced to seek emergency support from the Bank of England in September last year after the global credit crunch left it unable to fund its lending activities.
The lender was taken into public ownership in February after attempts to find a private sector buyer for the group fell through.