RBS to cut IT contractor hiring

Royal Bank of Scotland is to cut 3,500 jobs across its business and technology services operations, in a cost-saving move that will hit both its full-time and contract IT staff.



Announcing its second round of IT job cuts in the UK, RBS said headcount at Technology Services would be reduced by 1,000, and by 2,500 at Business Services.



The cuts, due to bite until 2012, are in addition to the 9,000 positions which the bank axed in April and the 500 IT jobs which its wealth management unit shed in June.



Although they will primarily impact permanent employees, the latest round of job cuts will not be missed by IT contractors who work at RBS or hope to in the future.



An RBS spokeswoman told CUK that, while there is no formal freeze on temporary IT hires, the bank was committed to reducing its intake of contractors to help protect its permanent employees.



Lowering the number of contractors was proposed as a way to minimise the impact on full-time staff from the bank having to reduce its workforce between now and the end of 2012.



"Having to cut jobs is the most difficult part of our work to rebuild RBS and repay taxpayers for their support," says an RBS statement on the issue.



"We continue to make efficiencies across our business and adjust our plans in line with the divestments we have been required to make by the EU."



In line with the statement, union Unite said one third of the job cuts owed to RBS being ordered to sell 318 high street branches to Spanish banking group Santander.



The remaining two-thirds of the reductions are due to RBS's restructuring, which has already resulted in 20,000 UK-based layoffs, and its aim of saving £2.5billion a year.



However Rob Macgregor, Unite national officer, said the latest cuts were a "specially bitter pill" for the bank's UK staff to swallow, as up to 500 jobs will be sent offshore.



These outgoing jobs - all non-customer facing IT roles - are destined for the US, India and the Far East, though will likely affect only a "minority" of contractors in the UK.



The RBS spokeswoman added: "We continue to move roles between countries including roles coming to the UK, and roles moving elsewhere, so as to maximise our efficiency and global capacity."



Three weeks ago, RBS, which is still 84 per cent owned by the British taxpayer, announced that first half-year profits at the group rose to £1.1billion.