Bank unions have labelled a plan by The Co-operative Bank to cut 1,000 jobs by the end of the year “brutal” and have pledged to take a “zero-tolerance approach” to redundancies.

Amicus, part of the merged union Unite, has demanded consultation with the bank, which runs the Smile online bank and is the biggest private sector employer in Manchester. David Fleming, national officer, called on Cooperative Financial Services (CFS) to “honour its reputation as an ethical corporate citizen”.

David Anderson, the chief executive of CFS, said that modernising its business was a necessity and that compulsory redundancies were “inevitable”.

It is the second big round of job cuts in three years to be unveiled by the CFS, which culled 2,500 staff in 2004.

“As a starting point to announce 1,000 job cuts and say what it said about compulsory redundancies is pretty brutal to staff,” the union said.

This time the axe will fall on back-office staff across the general insurance, banking and online operations. More than 10 per cent of the 9,000 staff employed by the Coop will go.

The company has promised that no frontline branch or sales staff will lose their jobs and said that it was preparing for a full consultation with Amicus. No branches will be closed as a result, it said.

Mr Fleming said: “This is a devastating blow for CFS staff. Unite will be taking a zero-tolerance approach to compulsory redundancies and we have high expectations that CFS will enter into meaningful discussions. We expect CFS to honour its reputation as an ethical corporate citizen and manage change in a way that reflects their high standing in the community.”

The cuts are designed to save £100 million in annual operating costs by the end of next year and modernise the Coop’s financial services operations, which have been hit by declining branch use, a hyper-competitive insurance market and the rise of the internet. Pretax profits for the year to last December fell £13.1 million to £146.2 million.

CFS said that operational improvements from the losses would benefit its six million customers. At the same time, it announced a £250 million capital investment in the business aimed at generating growth in its retail and corporate bank and general insurance operation.

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