RBS expected to axe hundreds of tech jobs despite run of glitches
THE Royal Bank of Scotland is planning to shed almost 900 tech jobs according to unions, as part of ongoing deep cost-cutting at the taxpayerowned bank.
The bank has briefed unions on its plans for its technology operations in London up to 2020, and Unite yesterday said these involved cutting 40pc of permanent IT staff, which equates to 650 jobs, and 65pc of contractors, or 230 roles.
The news was met with surprise by analysts, not least because the Edinburgh-based lender has suffered a raft of IT problems down the years, including computer glitches that caused it to abandon plans to spin off and float Williams & Glyn last year. Payment issues have also hit customers of RBS, and its subsidiaries Natwest and Ulster Bank, three times in five years, with a 2012 crash that left customers locked out of their accounts leading to two fines totalling £56m.
Laith Khalaf, senior analyst at Hargreaves Lansdown, said he fully expected further job losses at RBS, but was “a little surprised to see them in IT”. He cautioned that RBS was likely to have “a lot of legacy systems behind the scenes that require IT know-how to run and merge them, and deal with any problems”.
He added: “If I were an RBS investor I would be hoping to see commitment to digitisation because it is the future of banking.”
However, an RBS spokesman said cuts were a necessary part of its downsizing: “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 spokesman stressed that the proposals were at a very early stage, saying: “We have not consulted on any headcount reduction, instead sharing a direction of travel with Unite, which is subject to change.”
The spokesman added that while the bank was downsizing in London, it planned to “reinvest” in other parts of the UK.
RBS, which received a £45bn state bailout at the height of the financial crisis and is still 71pc owned by taxpayers, plans to cut £2bn in costs by 2020.
Earlier this month, RBS posted its first half-year profit in three years, prompting Ross Mcewan, its chief executive, to comment that there was “light at the end of the tunnel”.