The Bank of England has initiated a voluntary redundancy scheme as part of a broader £45 million cost-saving effort, putting hundreds of jobs at risk. The central bank has invited the majority of its workforce to apply for voluntary layoffs as it seeks to reduce its day-to-day budget by 8 percent. While no specific number of job cuts has been disclosed, sources indicate that the Bank could face significant staff reductions, including potential compulsory redundancies if voluntary departures fall short.

Last week, the Bank wrote to its approximately 5,700 employees, offering them the chance to resign by January, with departures expected to take effect by March. Employees opting to leave under the scheme will receive a severance payout of 10 percent of their salary for each year of service, up to a maximum of two years’ salary or £150,000, whichever is less.

The drive to cut costs comes amid ongoing financial pressures following a strategic overhaul influenced by a review from Ben Bernanke, former Chairman of the US Federal Reserve. In addition to budget constraints, the Bank faces expenses related to modernizing its technology infrastructure. A spokesman emphasized the institution’s commitment to maintaining monetary and financial stability while pursuing a multi-year transformation aimed at enhancing operational efficiency and resilience.

Certain sections of the Bank’s workforce are exempt from the redundancy process, including staff at the Leeds office, which employs more than 100 people and is earmarked for expansion. Similarly, senior executives, including Governor Andrew Bailey, four deputy governors, and Chief Operating Officer Sarah John, will not be affected by the cuts. Earlier this year, John indicated to the Bank’s directors that ambitious efficiency targets were necessary to control the levy imposed on Britain’s financial services industry. She also acknowledged that meeting these targets would involve challenging compromises.

The Bank’s staff numbers have risen sharply over the past decade. The average number of employees in the most recent financial year ending February 2025 was 5,731, up from 3,680 ten years prior and fewer than 2,000 in 2012. The trade union Unite, representing Bank employees, expressed opposition to compulsory redundancies and called for job-cutting procedures to be conducted with transparency and fairness.

These workforce reductions occur against a backdrop of a challenging jobs market in the UK, with unemployment reaching 5 percent—the highest rate since 2021. A recent report from auditors KPMG and the Recruitment and Employment Confederation noted that hiring activity remained subdued in the past month, as employers awaited greater clarity ahead of the upcoming government Budget.