RBS preparing to cut nearly 900 IT jobs, says union

Royal Bank of Scotland is preparing to cut nearly 900 IT jobs, union officials have warned, as the bailedout bank continues to trim costs in its battle to regain profitability.

Officials at the Unite union said 880 posts were at risk, with RBS planning to lose 40% of permanent IT staff in London and 65% of contractors by 2020.

Rob MacGregor, Unite national officer, said: “RBS’s fixation with cutting employee numbers, restructuring and offshoring work that could reasonably be done by displaced staff within the RBS IT community is unacceptable. This British-taxpayer funded bank should be concentrating on investing in jobs here in the UK, rather than wholesale cuts.”

RBS said it had not consulted on staff numbers with unions but had shared “a direction of travel” about the IT operations.

“Our proposed plans are designed to reduce the number of contractors we employ and strengthen our permanent workforce and while we are downsizing in London we are reinvesting in other UK hubs,” a spokesperson for the bank said.

“Inevitably as RBS becomes a simpler, smaller bank focused on the UK and Ireland, our technology function will undergo reorganisation and will reduce over time,” the spokesperson added.

The bank has been plagued by IT problems in the past, notably in June 2012 when 6.5 million customers were locked out their accounts for days. The company, which owns NatWest and Ulster Bank, was fined £56m in 2014 by financial regulators for the outage.

The bank’s interim results this month showed the scale of job cuts already undertaken. Over the past 12 months, some 14,200 roles were lost, taking the workforce to 75,000. A decade ago, before its near-collapse, RBS employed more than 200,000 people around the globe.

Ross McEwan, the chief executive who is focusing the operation on the UK and Ireland, has conceded that more jobs are at risk as he attempts to return RBS to profitability for the first time since its taxpayer bailout in 2008.

MacGregor said: “The decade of slashing jobs has done nothing to boost morale, increase consumer confidence or improve the bank’s performance. By 2020 just a fraction of the RBS IT function will remain, leaving this organisation operating a skeleton service with the customers and remaining staff paying the price.”

In June, it emerged that 443 RBS jobs were being cut in the UK and being moved to India, where Unite has calculated the bank employs 12,500. Jobs are also being lost in branches. In March, 158 branches – largely NatWest – were earmarked for closure as customers switched to digital channels.

The bank is on track to report 10 consecutive years of annual losses when it publishes its results for 2017 next February, and the chancellor, Philip Hammond, has conceded that the taxpayer stake will probably be sold at a loss.

The shares are trading at around 265p – compared with 502p that was paid on average during the bailouts in 2008 and 2009, when £45bn of taxpayer funds were used. Hammond’s predecessor, George Osborne, sold off a 5% stake in 2015 at 330p a share – a £1bn loss.