THE fall-out from the financial crisis continued yesterday as the Royal Bank of Scotland announced a further 2,600 job losses.
Up to 500 of the jobs are expected to be in Edinburgh and Glasgow in insurance and back-office operations.
RBS has now axed 22,600 jobs since it was bailed out by the taxpayer in October 2008. Until yesterday the impact on Scotland had been limited to 800 but will rise sharply on this latest announcement.
Between 300 and 500 of the insurance jobs in offices across the UK will be switched offshore. There was condemnation from the trade union Unite and from politicians on all sides.
Unite said its members would be "devastated" at the proposals, which will see 2,000 jobs lost in insurance out of a total of 16,000 over the next 12 months.
The businesses affected include Churchill, Direct Line, Green Flag and Privilege. Offices in Birmingham, Bristol, Bromley, Glasgow and Leeds are likely to suffer. Also earmarked for the axe are 600 jobs at the retail head office function which will mainly be centred on the London and Edinburgh offices.
This is due to the imminent sale of 318 branches forced on the bank by the European Commission as a condition of state aid.
Scottish finance secretary John Swinney said: "It is deeply disappointing to be facing further Scottish job losses on this scale, even if the process has been driven by the decisions on forced sell-offs taken by the European Commission and the Westminster government.
"It shows clear consequences of the forced break-up of banks, which has major implications for headquarters functions in Scotland".
First Minister Alex Salmond is due to discuss the issue with RBS chief executive Stephen Hester.
Mr Swinney added: "The good work the Scottish Government and others have put in over the past year in attracting further investment and 1,500 new jobs into the Glasgow financial sector from Esure and Tesco Bank risks being undermined by an announcement on this scale".
Rob MacGregor, Unite's 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".
He noted that about 500 jobs will be achieved through offshoring, although the bank has confirmed that these would not be customer-facing roles.
Mr MacGregor described the cut to one in four jobs in the retail head offices as "eye-watering". He added: "This comes barely 12 months after a previous job-shedding restructure in this business area".
RBS said the cuts were part of the restructuring of the business. "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," it said in a statement.
"We will do all we can to support our staff through this process and do everything possible to keep compulsory redundancy to a minimum".
The Scotsman
