Following recent speculation that HBOS contractors were about to be "offered" a rate cut, a cull of permanent IT staff has also been announced - following a 72% plunge in the bank's half year profits. It is understood that by year-end 5% of the IT workforce is to be laid off.

Initially, the bank is going to lay off up to 100 IT jobs in its mortgage operations division. The job losses are expected to be made in the bank's Edinburgh, Chester and West Yorkshire offices.

Despite this "streamlining" process, nearly 2000 IT workers will remain working for the UK's biggest mortgage lender.