Northern Rock is cutting up to 680 jobs as it continues its restructure ahead of a sale.
Posts across all levels are up for review, although compulsory redundancies will be kept to a minimum.
The bank, which is struggling with the subdued mortgage market and low interest rates, needs to reduce costs having posted a £242.4 million loss for 2010.
According to a BBC report, the lender employed 4,500 people when it emerged from a good bank/bad bank split last year and the latest cull will leave staff numbers below 2,000.
Since its rescue by the taxpayer in 2007, Northern Rock has been reduced a small bank dependent on retail funding, and while plans to return it to private ownership are in hand, it is unlikely that a buyer will emerge before the UK’s regulatory environment is more settled.