UK Asset Resolution to close Newcastle office
The company which holds mortgages once owned by Northern Rock is to shut its office in Newcastle where about 700 people work.
UK Asset Resolution Limited (UKAR) said most staff from its Gosforth office would be offered relocation to Sunderland and some to West Yorkshire.
The company said it was not cost-effective to operate from three sites.
The Unite union said the site closure was "devastating" news for the staff there.
UKAR was set up in October 2010 to manage the closed mortgage books of Bradford & Bingley and Northern Rock (Asset Management).
It came after Northern Rock was nationalised and then restructured into two separate entities - Northern Rock plc, which was sold to Virgin Money in November, and Northern Rock (Asset Management).
UKAR currently operates from three sites - Crossflats, in Bingley, West Yorkshire; Doxford, in Sunderland; and Gosforth.
It said it would be focusing its business in Sunderland and Bingley and the Gosforth site would be closed by mid-2013.
UKAR chief executive Richard Banks said its job was to wind down the mortgage books.
He said: "As a consequence, we will need fewer people and it will no longer be cost effective to run the business from three sites. Our duty is to deliver value for money for our owner, the UK taxpayer.
"The loss of some jobs is regrettable but we will work hard with colleagues and the union to relocate people where possible and offer support to those colleagues affected."
Unite national officer David Fleming described the closure as "devastating".
He said: "Just last month the region had the great news that Virgin Money would commit to the Northern Rock site in the North East.
"This much needed boost has been short lived. There is a need for urgent action to support the financial services sector of the region."