RBS slashes jobs as public stake rises

By politics.co.uk staff

The Royal Bank of Scotland (RBS) announced plans to cut 9,000 jobs today, as the government’s stake increased to 70.3 per cent.

Only 0.7 per cent of shares put up for sale were bought up by private investors, leaving the Treasury to underwrite the rest.

The job losses add up to around half of the jobs RBS has in the UK. The company plans to cut annual costs by £2.5 billion.

“The actual number of jobs lost is expected to be significantly lower than this,” the bank said.

Vince Cable, Liberal Democrat Treasury spokesman, said: “Ordinary workers are now paying with their jobs for the unsustainable and irresponsible practices of RBS’ previous management.

“Regrettably, these job losses are an inevitable consequence of the awful results of RBS over the past year.

“As he enjoys his multi-million pound pension, Sir Fred Goodwin should spare a thought for the thousands of people he has now put out of work.”

Rob MacGregor, national officer for the union Unite, said: “The news that 4,500 RBS staff in the UK are to lose their jobs is truly devastating.

“Unite is appalled that thousands of people, who form the backbone of the RBS operations, are to be made redundant. These employees are totally blameless for the current position which RBS is in, yet they are paying for the mistakes at the top of the bank.”

Stephen Hester, chief executive of RBS, said: “We have set a new strategy for RBS to restore the bank to standalone strength as soon as practicable.

“From this we want the government to be able to realise value from its investment in RBS. To do so we need to cut our costs, as in all businesses, given the current recession. Unfortunately that means taking difficult decisions about jobs.”

This morning the RBS share price dropped to 27.90p on the confirmation of the increased government stake, falling 6.38 per cent