Question:

RBS to cut a further 9,000 jobs

by Red Brick | 3 years, 1 month(s) ago

0 LIKES Like UnLike

Tags: 9000, cut, jobs, RBs

Report

Answer The Question I've Same Question Too

Follow Question

1 ANSWERS

Sort By: Date | Rating

Maira

The Royal Bank of Scotland is to shed a further 9,000 jobs, half of them in the UK. BBC Scotland understands the losses are to be in its back office operations. These include document processing, information technology, procurement and bank property - a division known as Group Manufacturing. The company would not say where the job losses would have most impact within the UK. Unions described the news as "truly devastating". The cuts come on top of the 2,700 job losses already announced by RBS in Britain this year. Group Manufacturing is the biggest single part of the troubled financial giant, employing a total of 45,000 people worldwide at a cost of £1.2bn last year. Of those staff, 27,000 work in Britain, so within the division, the job cuts represent one job in five. 'Minimise' redundancies The UK hub of Group Manufacturing is in Edinburgh - where the group is also headquartered - with other significant employment centres, including NatWest, in London, Manchester and Bristol. The decisions on where jobs will be go is to be worked out at a more local level with staff unions. While the aim is to avoid compulsory redundancies, the company wants unions to be flexible on where people work and where they are re-deployed. The international hubs of the Group Manufacturing division include about 4,000 employees in Greenwich, Connecticut, covering North America. The same number work in that division covering continental Europe from Amsterdam. A further 10,000 are employed in a combined Asian operation based out of Hong Kong, Singapore and Mumbai in India. Facing a loss for last year of £24.1bn, and propped up by a huge injection of government capital, RBS is under pressure to ensure it recovers within a target of between three and five years. It is likely the announcement will be the largest single tranche of job losses as the company seeks £2.5bn of cuts in its cost base over the next two years. The whole company employs more than 170,000 people, of whom 106,000 work in the UK. We need to cut our costs, as in all businesses, given the current recession. Unfortunately that means taking difficult decisions about jobs Stephen Hester RBS chief executive It has already announced 2,700 job losses in Britain this year, from its UK corporate division. Since the start of the credit crunch, it has announced the shedding of about 15,000 jobs worldwide, including the Group Manufacturing announcement. The bank has stressed that the 9,000 staff being lost from Group Manufacturing will not all be under pressure to leave. Indeed, it has agreed with British and Europe-wide unions that it will try to minimise compulsory redundancies. A bank spokesman said the intention was to re-deploy staff into areas of the bank that are expanding, with 650 new jobs already identified. The bank also reckons on turnover of its staff of about 10%, even in the recession. Over two years, that number of departures from the Group Manufacturing division could come close to the total number of job reductions being sought. In addition, there is a voluntary redundancy scheme, and contract staffing will be cut back. The reasons being given for the cutback include a downturn in the amount of business coming through RBS. There is also an extensive programme for automating its processes, with more customers using online banking, and new software that should speed and open up the process for loan applications. Even before it ran into severe financial difficulties, RBS intended to lower its staffing as part of the integration of the Netherlands-based bank, ABN Amro, which it bought nearly two years ago, and which has since been seen as a key reason for RBS's downfall. Customer concern Much of RBS's Asian assets are up for sale, as it sheds about a fifth of its balance sheet seen as non-core. It is reported that those interested in buying are Standard Chartered, HSBC, and ANZ, the Australia and New Zealand bank. Without those assets, there is less reason to maintain 'manufacture' on the current scale. Stephen Hester, chief executive of RBS, said: "We have set a new strategy for RBS to restore the bank to standalone strength as soon as practicable. From this we want the government to be able to realise value from its investment in RBS. "To do so we need to cut our costs, as in all businesses, given the current recession. Unfortunately that means taking difficult decisions about jobs as well as taking many other cost reduction actions. Unite is appalled that thousands of people, who form the backbone of the RBS operations, are to be made redundant Rob MacGregor Unite national officer "We want to be as open and transparent as possible and are announcing these plans at the earliest possible opportunity so that our employees can prepare for the future." A source at RBS commented: "We don't need as many people as we did when we were earning £10bn a year. Just about every customer of ours is now laying people off. Banks that are really healthy are laying people off. "Our customers are saying to us: 'I hope you don't have anybody working in there that you don't need'. It's really important that we are as lean as we can be." Rob MacGregor, national officer for the union Unite, said the news of the UK job losses was "truly devastating". He said: "Unite is appalled that thousands of people, who form the backbone of the RBS operations, are to be made redundant. "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 government must defend jobs and act urgently to put in place a clear programme of action to protect jobs in this country. This bank, which is majority owned by the taxpayer, must not be allowed to shed jobs and leave people on the dole." Job shedding has also been affecting financial firms that do not face the severe difficulties on RBS's balance sheet. In the past two weeks, HSBC has moved to shed as many as 3,000 jobs, according to union calculations, or 1,200 according to the bank. Aviva, the insurance company including Norwich Union, announced last week it is to reduce its workforce by 1,700.
Report (0) (0) | 3 years, 1 month(s) ago