Royal Bank of Scotland yesterday announced plans to cut another 2,600 jobs as it gears up for the forced sale of its insurance businesses, which include Direct Line and Churchill. More than 2,000 of the job losses will hit workers at the insurance operations. Of these, 500 posts will be "offshored" to cheaper locations overseas. The remaining jobs will be shed at RBS's head offices in London and Edinburgh.
The bank, which is 84 per cent owned by the taxpayer, insisted last night that it would work hard to ensure that there were only a limited number of compulsory lay-offs, with the majority of posts likely to go through voluntary redundancy or "natural wastage".
However, of the more than 20,000 posts that have so far been axed by the company, around a quarter have been axed through forced redundancies. If it continues at that rate, around 650 of the jobs will be compulsory lay-offs.
A spokesman for RBS said the job cuts were necessary to return the company to health and facilitate a successful flotation of its insurance arm, which is currently loss-making.
"We are working hard to rebuild RBS in order to repay taxpayers for their support, and having to cut jobs is the most difficult part of this process. We have strived at all times to be open and honest about the tough choices we are making," the spokesman added.
"We will do all we can to support our staff through this process and do everything possible to keep compulsory redundancy to an absolute minimum."
However, unions reacted angrily to the move. Rob MacGregor, Unite national officer for finance, said: "Taken together, this is a devastating blow for a dedicated workforce which has worked very hard to turn around the fortunes of RBS following some disastrous decisions by the previous management.
"Unite is completely opposed to compulsory redundancies and will be engaging continually with RBS throughout the consultation period to minimise redundancies, while calling upon the bank to manage these reductions outside of compulsory measures."Reuse content