Tweet
Royal Bank of Scotland is finalising plans to cut 3,000 jobs in its investment banking business in a move that will send shivers through London's Square Mile. The bank, which is receiving a £20bn handout from the government, expects to brief staff in the next couple of weeks about the cull, which could trigger further job losses in businesses that rely on the bank.
More than 10,000 jobs are expected to go at Citigroup, the US bank which has 12,000 staff in the UK, with 350 jobs at Clydesdale and Yorkshire banks. New Star, the City fund manager that counts Lakshmi Mittal, the billionaire steel magnate, among its clients, said it was shedding 50 to 60 jobs from a workforce of 370. The mounting job losses dampened an early rise in shares in London and pushed Wall Street lower, reflecting increasing gloom that the economies of over-indebted western nations would struggle in the short term.
MPs have become increasingly agitated about job losses in their constituencies over the coming months and the potential electoral backlash. John McFall, Labour MP for West Dunbartonshire and chairman of the Treasury select committee, urged RBS to protect its 170,000 staff, 100,000 of whom are in the UK, and the bank's Gogarburn headquarters on the outskirts of Edinburgh, from the cuts.
"The headquarters of RBS in Scotland are a symbol of the investment that the company has made in Gogarburn. This must be illustrated by their decision." RBS insiders indicated the axe would fall on staff in its global banking and markets division, badly hit by the slowdown in trading in exotic derivatives after the credit crunch.
RBS, like many other banks, had also become involved in raising capital for foreign companies and lending money for takeovers. These deals have largely dried up since last summer when the credit squeeze began. RBS would not officially confirm that 3,000 jobs are being cut. "We constantly review our operating model to make sure it is appropriate to the market condition," said a spokesman.
guardian.co.uk © Guardian News & Media Limited 2008 | Use of this content is subject to our Terms & Conditions | More Feeds
More...
Comment