LONDON (AP) — British mortgage lender Northern Rock says it plans to cut as many as 650 jobs as a further step toward returning to private ownership.

Northern Rock was Britain's first victim of the credit crisis and was taken over by the government in 2008.

Chief executive Gary Hoffman said yesterday that the company's volume of mortgage business was only 20 percent of pre-crisis levels, and the company is trying to match staffing more closely with workload.

Northern Rock has been split into two companies, one that will return to private ownership and a second one that will be liquidated after winding down bad debts. It now has 4,500 employees. Hoffman says the company hopes to avoid compulsory lay-offs.