Just days after Royal Bank of Scotland (RBS) confirmed that it would cut more than 550 investment adviser positions in the UK and replace them with so-called "robo-advisers", the bank is preparing to shrink its investment banking workforce in the UK and move a major chunk of it to India.
The fresh round of job cuts – part of the bank's restructuring plans – will affect back- and mid-office positions in its investment banking division, including some technology jobs. The layoffs will happen in London, Newcastle-under-Lyme and Manchester and will take effect by the end of 2017, the Guardian reported.
The majority taxpayer-owned bank will move about 300 of these jobs to its existing operations in Gurgaon and Chennai in India. Announcing its results for 2015, the lender said that it had incurred a loss of about £2bn ($2.8bn, €2.5bn) – its eighth consecutive annual loss. Chief executive Ross McEwan said that the bank is committed to restructuring its operations to save costs.
In a statement issued earlier, RBS had said that unfortunately its restructuring measures will lead to some job cuts, but it will try to redeploy its staff wherever possible. "As part of RBS's drive to be a stronger, simpler and fairer bank, we have been restructuring our corporate & institutional bank, as well as reducing its size, to focus on our core customers and products," the statement read.
"As this process continues our frontline staff need a simpler, clearer, more efficient relationship with our middle – and back-office functions to better serve customers, so we're reshaping our services business accordingly. Unfortunately the changes will result in some job losses."
The cash-strapped lender is also planning to pass on the increased insurance costs, arising from the closure of the second state pension from April, to its 27,000 defined benefit pension scheme members, the Financial Times reported. The increased costs amount to about £18m.
The UK government is abolishing the second state pension scheme from April this year, which will raise national insurance costs for certain companies with certain defined benefit arrangements.