ABOUT 1,500 workers employed by Virgin Money and the Cydesdale and Yorkshire banks (CYBG) are in the firing line after the lenders agreed a £1.7 billion takeover deal.

The new group, which plans to keep the Virgin name for its retail banking, will have its head office in Glasgow, putting a question mark against the long-term future of Virgin Money’s Newcastle site which employs 2,100 staff.

Once the deal gets shareholder approval it should be completed before the end of this year.

CYBG has given assurances to maintain a significant presence at Virgin’s North-East offices for the next three years only.

CYBG's David Duffy will stay on as chief executive, leaving Virgin Money’s highly-regarded boss Jayne-Anne Gadhia to serve in a consultancy role as his senior adviser for now although her long term future could lie elsewhere.

Sir Richard Branson, meanwhile, is expected to rake in royalties for CYBG's use of the Virgin brand - at a minimum fee of £15m annually after the first four years that the combined group is operating.

The bulk of the job cuts will affect senior management positions, as CYBG has said there is "very little in overlap" in customer-facing roles.

Chi Onwurah MP for Newcastle Central, said: “When Virgin Money took over what had been Northern Rock (in 2012) I was concerned about their long term commitment to staff, the head office in Gosforth and the Northern Rock foundation which supported many charities across the region.

“Now the announcement of the takeover of Virgin Money by Clydesdale & Yorkshire Banks only gives some assurances for the next three years I will be seeking better assurances about the future for the staff and local communities.”

Staff will find out in the coming weeks if their jobs are safe. The Northern Echo understands that the new group wants to retain the best talent and that it would be misleading to suggest the lion’s share of the job cuts will fall on Virgin Money. Roles which overlap elsewhere in the group will be culled.

Ms Gadhia said she had "obtained assurances from CYBG regarding our employees".

"The combination of Virgin Money with CYBG will have greater scale to challenge the big banks.

"It will also accelerate the delivery of our strategic objectives, particularly the expansion of the products we offer to customers."

The Virgin Money boss added: "This is a compelling deal for our shareholders, that accelerates value delivery and represents the beginning of the next chapter of the Virgin Money story."

Unions hit out at the planned job cuts.

Rob MacGregor, a national officer at Unite, said: "The purchase of Virgin Monday by Clydesdale and Yorkshire Bank will change the face of banking in many high streets across the country.

"It is vital that the skilled and experienced workforce are given assurances that branches and contact centres will not be closed leaving customers without their much valued access to local banking."

Mr MacGregor is now calling for an urgent meet with Mr Duffy in order to secure assurances for staff.