×

RBS plans to cut 880 IT jobs by 2020, UK labor union says

  • U.K. labor union Unite says RBS told staff it would cut 880 IT jobs in London by 2020.
  • It claims the bank informed staff of a further 40 percent cut of permanent IT staff.
Justin Tallis | AFP | Getty Images

The Royal Bank of Scotland plans to cut 880 jobs from its IT department in London by 2020, according to a U.K. labor union.

Britain's Unite union claimed on Tuesday that the bank had informed staff of a further 40 percent cut of permanent IT staff, as well as a 65 percent reduction of contractors.

RBS employed 2,200 IT workers in 2016, but in three years' time plans to reduce those numbers to 950, the union said.

"Royal Bank of Scotland is continuing with its savage jobs culling program with today's announcement of a 40 percent cut in IT staff, totaling nearly 900 staff," Rob MacGregor, national officer for Unite, said in a statement on Tuesday.

"The decade of slashing jobs has done nothing to boost morale, increase consumer confidence or improve the bank's performance."

In March, the bank announced plans to close 158 branches – a potential loss of up to 362 jobs – due to a shift in customers preference for online banking.

RBS operating a 'skeleton service'

Unite said the bank would end up operating a "skeleton service" by 2020, and that it was offshoring careers overseas.

"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 instead on investing in jobs here in the U.K., rather than wholesale cuts," Unite's MacGregor said.

'Direction of travel' subject to change

A spokesman for RBS said in response that the bank was consulting on the "direction of travel" for IT jobs rather than cutting them.

He said numbers would eventually be reduced over time, but that the bank did not recognize Unite's jobs loss figure.

"Inevitably as RBS becomes a simpler, smaller bank focused on the U.K. and Ireland, our technology function will undergo reorganization and will reduce over time," the spokesman told CNBC via email.

"As we develop long term plans for our technology business, we have in the interests of transparency, started to share our emerging proposals on a future operating model with Unite. We have not consulted on any headcount reduction, instead sharing a direction of travel with Unite which is subject to change."

He said that the bank was considering regions in the U.K. other than London.

"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 U.K. hubs," he added.