(Credit: George Iordanov-Nalbantov)

The new strategy will identify the bank’s lowest-performing 5% of its 63,000-strong workforce, approximately 3,000 people. Those identified will be required to improve or face losing their jobs, with sources suggesting around half of this group could ultimately be dismissed.

The initiative is a key part of Chief Executive Charlie Nunn’s plan to reduce costs and foster a “high-performance culture”. Managers will rank employees, with underperformers being placed on “structured support” programmes. The bank is aiming to address unusually low staff turnover, which has fallen to around 5% annually compared to a historical average closer to 15%, as employees remain in their roles amid economic uncertainty, Financial Times reports.

This approach mirrors a management practice sometimes referred to as “rank and yank”, famously employed by former General Electric CEO Jack Welch. It also aligns Lloyds more closely with the “up or out” culture of US investment banks and consulting firms like McKinsey, where Mr Nunn was previously a partner.

In a statement, Lloyds said it was “transforming” its business and “striving to embed a high-performance culture”. The bank added: “We know change can be uncomfortable, but we are excited about the opportunities ahead as we propel forward to achieve our growth ambitions and delivering exceptional customer experiences.”