Royal Bank of Scotland (RBS) is to cut a further 1,400 jobs from its retail banking head office over the next two years, it announced yesterday. The Bank said that up to half of the losses will be at the bank’s offices in Edinburgh, where the ‘back room’ jobs under threat include marketing, communications and other support functions.
The latest round of redundancies follow the loss of more than 35,000 job cuts since public money was used to bail out RBS following the financial crisis – the government still owns more than 80% of the bank.
Ross McEwan, the chief executive of RBS’s UK retail operations, said: “To serve our customers well, we have to ensure that our resources are focused on the things that matter most to them. Regrettably, we can only do that by restructuring the way we work in head office, so that every effort is concentrated on supporting our customers and the frontline staff that serve them. This is clearly difficult news for our staff and we will do everything we can to support them, including seeking redeployment opportunities wherever possible to ensure compulsory redundancies are a last resort.”
The Unite union described the cuts as “brutal and irresponsible”. Warning of the impact that the cuts will have on local economies and customer service, Unite national officer Dominic Hook said: “This is brutal and irresponsible behaviour from RBS which is almost entirely owned by the taxpayer. It is high time that the banks took its social responsibilities seriously. Since the beginning of the year RBS, HSBC, Barclays and Lloyds have announced plans to slash around 6,900 jobs. The industry almost caused the economy to implode in 2008 and now it is contributing to a jobs crisis.
“RBS made £826 million in the first quarter of this year, the bank is returning to profit. Unite does not believe there is a business case for cutting jobs so drastically. RBS argues that the restructure will make the bank more customer focused but a bank can’t be more customer focused with 1,400 fewer staff. Unite is demanding no compulsory redundancies and we expect this state-owned bank to do everything to ensure this is the case.”
There will be a significant impact on RBS staff in head office functions in Edinburgh with the rest of the cuts spread across the country. Two departments providing support to front line staff are being cut by 80 per cent. Since 2008 the bank has cut over 30,000 staff.
Local politicians have also expressed concern over the job losses. Speaking after yesterday’s announcement, Edinburgh Western MSP Colin Keir said: “This is devastating news and I understand that the bank have spoken to the Scottish Government who are acting as quickly is as possible to ensure that appropriate support can be brought in to minimise the impact and soften the blow for the people concerned. The staff facing this terrible news are not the ones who caused the crisis at RBS but members of staff with mortgages and everyday budgets and expenses – and many of them are my constituents. I met RBS this afternoon and have discussed how they will support staff through this difficult time.
“Whilst this news is deeply disappointing the long term investment being announced for Gogarburn, highlights the strength of business locating in Scotland, and I hope this will increase long term security for RBS employees. My thoughts are with the people who are experiencing losses today.”
North and Leith MP Mark Lazarowicz said: “This is a body blow to staff at RBS at what is a difficult time for anyone looking for work. I have been in touch with union officials in support of the staff and I will be seeking a meeting with senior management to discuss the redundancies. At the meeting I will be asking for a clear indication of future employment plans for the bank’s Edinburgh operations and assurances that these job losses are not part of a policy of outsourcing.
“The Chairman and Chief Executive of RBS claimed recently that the financial restructuring of the bank was largely over and that the Government could start preparing to return RBS to the private sector. That should not be at the expense of hard working employees, many of whose colleagues have already paid the price of the failure of management at the bank in the years prior to the financial crisis through losing their jobs.”
Councillor Frank Ross, the city council’s Economic Convener, said: “While this is disappointing news, Edinburgh remains an important player in the world financial markets. We were always aware that the financial crisis would result in a degree of restructuring in the finance sector and that, unfortunately, this would impact on levels of unemployment in the city. Obviously we recognise that this brings great uncertainty and worry for those affected. For this reason, we will seek to work with the Government, their agencies and our partners to ensure the workforce are supported as much as possible and I will be pulling together a task force to coordinate this activity.”
Hugh Rutherford, Chair of the Edinburgh Business Forum, said: “Although disappointing news we need to remember the financial institutions who have recently opened centres here including Tesco Bank, Sainsbury’s Bank and the Green Investment Bank thanks to our talented and skilled workforce. This continued investment from the financial sector in Edinburgh will help keep the City economy growing. The diversity and strength of the Edinburgh financial services sector, which has been growing through the downturn, and the skilled financial services workforce, will hopefully be absorbed by the new growth sectors in the financial areas of the capital.”
Earlier this month, RBS reported a return to profit the bank hopes to return to the private sector next year.
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