Lloyds is cutting 200 insurance jobs across functions, including IT and the back office, taking total group role reductions to over 26,000 in just two years.

The total cuts, including the insurance changes, are the direct result of the Lloyds-HBOS merger that began in January 2009. Four months ago, Lloyds announced it was cutting 4,500 IT jobs, a move branded by unions as “devastating” as application development and maintenance, service delivery, and enterprise architecture roles were removed.

The latest cuts, in the bank’s insurance business, affect staff in Edinburgh, Newport, Chester, Leicester, Copley, West Yorkshire and Shannon in Ireland.

Trade union Unite attacked the cuts. David Fleming, national officer, said it was “inexcusable” that while incoming Lloyds chief executive Antonio Horta-Osorio “is one of the best-paid executives in Britain with a pay package of £8.3 million a year, staff earning an average salary of less than £20,000 are joining the dole queues”.

Lloyds instead insists it is minimising redundancies by offering redeployment to as many staff as possible. A spokesperson added that by half-way through the last financial year, Lloyds had redeployed over an eighth of those whose roles had been cut.

“The overwhelming majority of role reductions has been achieved through redeployment, natural turnover, closing vacancies, expiry of temporary contracts and voluntary redundancy,” the spokesperson said.

As the Lloyds-HBOS merger progressed, the group recently insisted it was on track for £1.3 billion in cost reductions this year. A major system integration project between Lloyds and HBOS IT is also playing a part in the financial savings, and involves a range of core systems.