Horta-Osorio says the cuts are vital because Lloyds is still losing money on an after-tax basis: 'We have to get this bank back on its feet,' as he (rather melodramatically) put it. And given that, as he points out, the bank tends to employ about 10,000 staff a year anyway, he might even be able to do it via 'national attrition and internal deployment', ie, without mass redundancies. The idea is that his planned reforms of the bank will save £1.5bn a year by 2014 – which clearly went down well with investors, judging by Lloyds' share price bounce this morning.
But what will be the real cost of these cuts? Well, Lloyds reckons £2.3bn, in purely financial terms. The unions, however, have been keen to highlight the human cost for all those affected, and its likely impact on service levels across the group. As you'd expect, Horta-Osorio insists it won't be a problem – not least, he says, because the cuts will apparently target back office functions and middle management rather than front-line staff.
Now forgive us if we sound a little biased here. But we can't help getting a bit annoyed about the (increasingly prevalent) suggestion that the work middle managers do is somehow less valuable. Insofar as the group does a good job of servicing its customers – and given that it was singled out for praise by Vince Cable lately, that includes corporate borrowers – that's partly down to the organisational skill of those behind the scenes, as well as the smiling faces at the counters.
Of course, if Lloyds is losing money, it needs to find cost savings somewhere. And it almost certainly can afford to lose some of its middle managers. But it's hard to believe it can lose so many without it disrupting service levels to some extent. Horta-Osorio is going to have a difficult balancing act in the next few years.