“Remove the cost burden” … “reconfigure the front office” … “re-platform large parts of this business.” However you describe it, RBS is about to cut a huge number of jobs at its investment bank.
CEO Ross McEwan last week said, in addition to the euphemisms above, that the British bank’s radical restructuring will involve “substantial” job losses. While he didn’t give a specific number, anonymous sources, first in the Financial Times (paywall) and later in other outlets, put the figure at a whopping 14,000 out of the 18,000 employees who work in the company’s investment banking division. Substantial, indeed.
A bank spokesperson would not comment on the rumored number and tells Quartz that no announcement would be made before employees themselves are notified. At the end of last year, RBS employed around 108,000 people.
What’s already known is that the investment bank will shrink from covering 38 countries last year to just 13 by 2019. Both funded and risk-weighted assets will be slashed by two-thirds over the same period, the beleaguered bank has said. It stands to reason that jobs would likely be cut in a similar proportion, and that’s how you come up with 14,000 layoffs, more or less.
Rival banks in Britain aren’t exactly in a hiring mood, so if the rumors are to be believed, the ranks of laid-off RBS bankers could consider forming a new company that would be as big as many well-known multinationals. As it happens, broker Charles Schwab and Danske Bank, Denmark’s largest lender, both employ around 14,000 people. So do Club Med and Euro Disney, something for the bankers to keep in mind if they are looking to do something different—the pay wouldn’t be the same but the atmosphere would be considerably happier.
Source: FactSet, press reports