RBS to shed 9,000 jobs as part of restructuring process
07 Apr 2009
Royal Bank of Scotland Group Plc, the biggest bank controlled by the UK Treasury, may eliminate an additional 9,000 jobs worldwide as it seeks to repay a government bailout. It said today that it has begun consulting employee representatives about a new business plan for its back office operations that can result in the job reductions.
The cuts total about 5 per cent of RBS's global workforce. The actual number of jobs lost may be ''significantly lower'' because of efforts to shift employees into new positions, Edinburgh-based RBS said in a statement. RBS said the plan includes other initiatives, such as moving to a common technology platform, and will help the bank achieve its previously stated £2.5 billion ($3.7 billion) cost-cutting target.
RBS may be forced to eliminate more positions as it seeks to pay off government aid and return the bank to shareholder control. The announcement came after RBS earlier said non-government shareholders subscribed to only 0.7 per cent of shares issued in an open offer to raise £5.37 billion, leaving the government to buy the rest and lifting the state's stake in the bank to 70.3 per cent from 57.9 per cent. (See: British government becomes majority shareholder in RBS as investors reject stock offering)
The potential job losses include about 4,500 in the UK, adding to 2,700 announced previously, an RBS spokesman said. Most of the positions will be eliminated in the bank's group manufacturing division, which includes technology, purchasing and property services, RBS said.
''We have set a new strategy for RBS to restore the Bank to standalone strength as soon as practicable,'' CEO Stephen Hester said in the statement. ''Unfortunately, that means taking difficult decisions about jobs.''
RBS posted a net loss of £24.1 billion ($34 billion) last year, the biggest in UK corporate history ( See: RBS splits assets after record $34 billion net loss)
The Unite trade union said it was unfair that RBS employees were losing their jobs because of the mistakes made by senior management. ''These employees are totally blameless for the current position which RBS is in, yet they are paying for the mistakes at the top of the bank,'' the union said in a statement. "This bank, which is majority-owned by the taxpayer must not be allowed to shed jobs and leave people on the dole.''
