RBS in IT staff slash frenzy

The 71 per cent taxpayer-owned Royal Bank of Scotland (RBS) told staff this week that it will slash its IT operations in the UK by 40 per cent, even after a raft of IT glitches that cost the bank millions in fines.

RBS briefed Unite on Tuesday (August 15) that it would cut 65 per cent of contractor IT roles, totalling 230 jobs and a further 650 permanent IT posts. This will bring total job losses to 900 staff, leaving only 950 full-time posts in IT in the next three years.

The bank, which has operated at a loss for the last decade, has been plagued by IT problems, most notably in 2012 when an IT breakdown locked out more than six million customers from their accounts for days – a glitch for which the bank was fined £56m in 2014.

In another IT failure in 2015, 600,000 customer payments and direct debits temporarily disappeared.

This week’s job slash plans are only the latest in an ongoing cull that aims to cut costs at the expense of staff and customers.

Only two months ago in June, RBS announced it would cut more than 400 jobs in small business lending and move them to India. Another 400 jobs were moved to India last year, including 300 investment banking jobs.

In the last year alone, RBS has shed more than 14,200 jobs globally. At its peak, the bank employed more than 200,000 around the world – now it employs only about 75,000. RBS bank branches are also shutting at an unprecedented rate – the bank announced in March that it would close 180 branches more branches.

Bad move

Unite national officer for finance Rob MacGregor argued that job cuts are not only bad for the many thousands who have lost their jobs; they’re bad for customers and bad for business too.

“Royal Bank of Scotland is continuing with its savage jobs culling program with today’s announcement of a 40 per cent cut in IT staff, totalling nearly 900 staff,” MacGregor said. “The decade of slashing jobs has done nothing to boost morale, increase consumer confidence or improve the bank’s performance.”

Indeed, the bank has fared badly financially in the decade after the crash, when it received a ÂŁ45bn taxpayer bailout. RBS is on track to report losses for the tenth year in a row. It is not expected to return to profitability this year because of a large fine being imposed on the bank for its involvement in the subprime mortgage crisis.

And chancellor Philip Hammond admitted earlier this year that the bank will likely have to be sold at a loss. Currently RBS shares are trading at 265p, down from 502p at the time of the bailout.

Commenting on the latest job cuts, an RBS spokesperson 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.”

But MacGregor slammed the bank for slashing its IT operations, which are integral to the bank’s success in an increasingly digitised world.

“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,” he 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,” MacGregor added. “This British-taxpayer funded bank should be concentrating on investing in jobs here in the UK, rather than wholesale cuts.”