UK bank RBS job cuts reach 27,000

London, England (News Today) - Royal Bank of Scotland is axing another 3,500 jobs, taking to almost 27,000 the number of staff cut since Stephen Hester took over as chief executive of the troubled UK bank less than two years ago.

The cuts are part of a process to rationalise the RBS's back-office operations, halving to 10 the number of its key processing centres. As part of the exercise, sites in Leeds and Bolton will close next year, followed by Bristol, Liverpool, Milton Keynes, Plymouth, Telford, Bradford, Norwich and Harrogate in 2012. There will also be job losses at sites in Enfield and Borehamwood.

About a third of the cuts are understood to be related to the £1.65bn sale of 318 branches to Santander last month. Although branch staff are being transferred as part of the sale, back-office resources are not. RBS currently employs about 160,000 people globally.

For RBS's back-office staff, the cuts are another blow after 9,000 job losses last year. But for Mr Hester they are a crucial part of his bid to turn the bank around and trim it back from the bloated scale he inherited from his expansive predecessor Sir Fred Goodwin.

"Having to cut jobs is the most difficult part of our work to rebuild RBS and repay taxpayers for their support," the bank said. "We continue to make

Efficiencies across our business and adjust our plans in line with the divestments we have been required to make by the European Union. We will do all we can to support our staff, offer redeployment opportunities wherever possible and keep compulsory redundancies to an absolute minimum."

Job cuts at RBS are always politically sensitive, given the government's 70 per cent shareholding in the bank following a state bail-out in the wake of the financial crisis. RBS's surprise return to the black in the first-half of the year, when it reported a £1.1bn pre-tax profit, threatens to compound the fall-out.

Some other banks have also been cutting staff in recent weeks as evidence has mounted that the benign conditions of the first six months of the year have faded and economic uncertainty remains.

Last month, the Financial Times revealed that Barclays was cutting 400 staff from its previously fast-expanding investment bank. Barclays Capital, the growth engine of the whole bank over the past year, has been accused by analysts of ramping up its staff numbers and cost base in Europe and Asia without being able to generate equivalent revenue increases.

Source : CNN

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