The Royal Bank of Scotland (RBS), which is 84% owned by the state, has announced that it will be cutting 3,500 people from its payroll in the UK. This will come as a blow to the financial services sector, especially after RBS recently announced a healthy Â£1.1 billion in profits.
This takes the total that have been made redundant to 20,600 in the UK and 26,600 worldwide. The union Unite has said that this is turning into a 'horror story'. It is also thought that 500 new jobs will be created abroad out of those lost here.
Rob MacGregor, Unite national officer, said "Just three weeks ago staff were boosted to hear of the Â£1.1bn half-year profit yet today thousands of them are told that they have no future at the bank. ….. It will be a bitter pill for staff to swallow as RBS has decided to move some of the jobs abroad to the Far East, India and America."
RBS have said that cutting jobs is the most difficult part of their work in rebuilding the bank whilst repaying the taxpayer for their support. The jobs are to be taken from back-office roles not customer facing positions according to the bank.
Some of the cuts, about 1,500,Â have been brought about by the EU ordering the sale of 318 branches in return for the Â£54 billion bail-out by the government. These branches have now been bought by the Spanish bank Santander.
These cuts in jobs follow closely on the heels of Lloyds TSB's decision to lose 1,850 jobs earlier this year, with possibly more to come from its closure of 265 Halifax agencies in certain sites such as estate agencies.
Earlier this year RBS had to defend itself for earmarking Â£1.3 billion in bonuses while it made a loss of Â£3.9 billion in 2009.
The ones being hit at the moment are not the 'bankers' but the back office support staff. These people are also probably not in line for some of the massive bonuses that get paid out to certain workers. Also, if work is sent abroad as a result surely that means that the job needed doing. So where's the rationale for redundancy? If it can be outsourced to India it can be outsourced to an already employed worker.