Global lenders have had a rough H1 2016 thus far, with many big names embarking on lean budgets and sweeping initiatives in a bid to help restore profitability to what has largely become a lagging sector. The Royal Bank of Scotland (RBS) has joined the ranks of Deutsche Bank, Barclays, and Standard Chartered as the latest bank to gut parts of its UK workforce, estimated at 900 cuts, per a recent Reuters report.
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The narrative surrounding banks has been one of eroding profit margins, uneven cost of labor, and sagging revenues. While some lenders such as Deutsche Bank have opted to tackle this issue with a sledgehammer, i.e. the cutting of upwards of 35,000 employees across its global workforce, others such as Morgan Stanley have chosen to lead a more targeted approach, focusing on specific operations or retail strategies.
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The majority of banks seem to have a few common threads in their strategy however, i.e. mitigating their workforce in the UK and eliminating technology or back office roles, possibly two of the most expensive in per capita costs of labor across global operations.
Indeed, over the past four months alone, RBS has shed upwards of 5% of its UK workforce, with an additional 900 jobs slated for oblivion in the coming months – these cuts will be relegated to the commercial, retail, and private banking sector, of which technology and back office roles will be the target of layoffs.
Regardless of the cuts, it would be a mistake to write off RBS’ UK business as the lender still boasts an overall workforce that is 64,000 strong in the country, as of December 2015. The latest tranche of cuts will be in London, Edinburgh, Manchester and Birmingham, though 100 jobs will be transferred to India, no doubt in an effort to capture lower labor costs.
Since March 2016 however, RBS has parted way with 2,700 employees in the UK alone. According to RBS’ Chief Executive Ross McEwan in a recent statement to Reuters on the cuts: “We understand how difficult this is for our staff and will be offering as much support as we can including redeployment to other roles where possible.”