Major financial services provider Lloyds Banking Group has laid off 1,000 car finance staff in the first major wave of job losses.

The job losses, which largely affect HBOS staff, could be the first in a series of job culls as the bank tries to cut costs. 985 employees of the vehicle finance arm will now be affected. The integration of the banking group will bring about many job losses.

Rob McGregor of union Unite reportedly commented: Unite sees this announcement as the first test for the newly formed Lloyds Banking Group (LBG) to demonstrate its commitment to avoid compulsory redundancies . For the 985 people in LBG to learn that they are to lose their jobs will cause uncertainty for staff across the company. For some months now the employees of the company have had to live with almost daily speculation about the security of their jobs and the long-term plans for the company.

The news further confirms the damage done to the motor finance sector by the credit crunch . With new car sales slumping and finance restricted, the future of the sector is looking difficult.