Close Brothers Axes 600 Jobs Amid Car Finance Scandal and Mounting Losses

Close Brothers is cutting almost a quarter of its workforce, approximately 600 jobs, as the financial group navigates escalating costs related to a widespread car finance mis-selling scandal and recent financial losses. The cuts, impacting teams across the UK and Ireland, are part of a broader cost-cutting initiative aimed at restructuring the company and improving agility.

Job Cuts and Cost Reduction Plans

The job reductions, representing nearly a quarter of Close Brothers’ 2,600-strong workforce, will be implemented over the next 18 months. The company aims to reduce costs by £25 million in the current financial year ending September, an increase from a previous target of £20 million, and by an additional £60 million in the following financial year – a year earlier than initially planned.

These cost savings will be achieved through a combination of outsourcing and offshoring work, reducing the company’s office network, and accelerating the implementation of artificial intelligence (AI) technologies.

Financial Performance and Scandal Provisions

The restructuring comes as Close Brothers reported pre-tax operating losses of £65.5 million for the six months to March 31st. This figure includes an additional £135 million provision to cover potential payouts related to the car finance mis-selling scandal, bringing the total provision to £300 million.

The scandal centers around allegations that dealers inflated customer interest rates to earn hidden commissions, leading to higher payments for consumers unaware of these arrangements. The Financial Conduct Authority (FCA) is currently developing a redress scheme for affected drivers.

FCA Redress Scheme and Industry Pushback

The FCA is expected to finalize the details of its compensation scheme by the end of March 2026, but has faced resistance from lenders, including Close Brothers, Santander, and Lloyds Banking Group, regarding the calculation of consumer losses and appropriate compensation amounts. The FCA estimates that payouts are due on around 14 million unfair car finance deals, averaging approximately £700 each.

Viceroy Research Report and Market Reaction

Shares in Close Brothers experienced a 14% decline on Monday, March 16, 2026, following a report by Viceroy Research, a short-selling firm known for previous investigations into Wirecard and Home Reit. Viceroy Research alleged that Close Brothers had “substantially misrepresented” its exposure to the FCA’s redress scheme and suggested the provision for the scandal should be at least doubled. Close Brothers strongly refuted the report’s claims.

Strategic Asset Sales

In an effort to strengthen its capital position and prepare for the anticipated compensation costs, Close Brothers has been divesting assets, including its Winterflood and asset management businesses.

“Whereas the impact on affected colleagues is regrettable, these actions are necessary to structurally lower our cost base, while increasing our agility and ability to serve our customers,” said Chief Executive Mike Morgan.