Santander UK Freezes Pay, Cuts Jobs as Internal Upheaval Sparks Staff Discontent

Exclusive restructuring aims to tighten costs and streamline operations amid potential sale speculation and looming car loan scandal fallout

Santander UK is taking the knife to its commercial banking division — freezing salaries, trimming bonuses, and shedding jobs — in a move insiders say has rattled staff and thrown teams into confusion. The abrupt internal shake-up, which could affect around 200 employees, appears part of a deeper strategy to slash overheads and quietly reshape the bank’s British footprint.

Staff were blindsided earlier this month when their roles were reshuffled, job titles changed, and new reporting lines appeared almost overnight. Worse, many learned their pay bands had been downgraded — even if their pay couldn’t be cut outright — leading to immediate salary freezes and a grim outlook for bonuses.

Bonuses Shrink, Pay Bands Rewritten

Employees caught up in the restructuring say they’ve been left scrambling to understand what their roles even are now. According to internal emails seen by The Guardian, Santander has issued fresh bonus terms, warning that future payouts will be smaller — likely significantly.

One banker, who asked to remain anonymous, said the news “dropped like a hammer.” They’d spent five years working their way up, only to find themselves now parked in a team where the pay ceiling is 25% lower than before.

“It’s not just the money. It’s the way it was done,” they said. “No warning, no explanation. Just, ‘This is your new job and here’s your new pay band.’ It feels like they’re pushing people to leave.”

The restructuring hits hardest in Santander’s commercial banking business, including its Navigator platform — once hyped as the bank’s digital gateway for international trade.

• Navigator employees are now at risk of redundancy, despite the platform being launched just three years ago.
• Some teams have been merged or dissolved entirely.
• Many affected roles were part of what Santander previously called its “growth engine” for SMEs.

Job Cuts Reflect Deeper Pressures

The bigger picture is becoming clear: Santander is under serious pressure in the UK. Beyond just cutting operational fat, industry insiders say this latest round of belt-tightening could be positioning the lender for a potential sale or partial exit from the British market — something Spanish parent Banco Santander has reportedly been mulling behind the scenes.

The timing isn’t accidental either. The bank is currently bracing for possible losses stemming from the UK’s expanding motor finance scandal. Analysts at RBC Capital Markets estimate Santander could face up to £1.9 billion in compensation costs related to historic car loan commission practices.

It’s a staggering figure, one that would punch a hole in the bank’s UK profits. Trimming workforce expenses now could be an effort to soften the blow later.

“They’re clearly trying to make the numbers work ahead of what’s coming,” said one former senior Santander executive. “It’s textbook pre-sale hygiene. Clean up costs, stabilise your headcount, and you look much better on paper.”

Staff Reactions Have Been Fierce

The move hasn’t gone down well internally. Teams described being “blindsided” by sudden restructuring meetings, often held on short notice or over email, where new roles were outlined with minimal explanation. Many employees found their job scopes changed overnight, with unclear expectations.

One manager said they were informed their entire team would be absorbed into a different unit with different leadership and metrics, without even being consulted. “We weren’t given a say — it just happened,” they said.

Here’s a snapshot of how the shake-up compares with previous cycles:

Some speculate that the Navigator team’s sudden redundancy risk may indicate the bank’s long-term digital trade plans have faltered.

Regulatory Frustration and UK Business Fatigue

Beyond internal reshuffles, there’s growing chatter about Santander’s broader dissatisfaction with doing business in Britain. One senior source said the Spanish-owned lender has become “increasingly fed up” with what it sees as high regulatory overhead and lukewarm returns in the UK compared to its more lucrative Latin American and European operations.

While Banco Santander has publicly committed to the UK in the past, its recent actions suggest it’s weighing its options more seriously now.

Back in Spain, Santander’s global leadership has spent the last 18 months tightening group strategy and cutting exposure to lower-return markets. If the UK continues to underperform, insiders say it wouldn’t be shocking to see a sale, spin-off, or partial divestment.

That scenario would mark a major shift. Santander UK, which entered the market aggressively in the early 2000s by buying Abbey National, has long been considered a cornerstone of its European portfolio.

But now? “The UK isn’t sacred anymore,” said a person close to the matter. “It’s just another market with a headache.”

What Happens Next?

For now, the affected employees are stuck in limbo. Redundancy consultations are ongoing. Some teams still don’t have clear reporting lines. Others are watching and waiting, wondering if more cuts will follow.

There’s no official word from Santander on whether further job losses are coming. But given the tone of internal communications, few believe this is the end of it.

The bank, meanwhile, continues to project calm externally. A spokesperson declined to comment on specifics but said Santander UK “remains committed to supporting its customers and improving efficiency.”

That may be cold comfort for the hundreds wondering whether their jobs are next.