RBS to trim £65m from its cost base by cutting contractor pay

 
Tim Wallace
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RBS is reducing contractors’ pay by 10 per cent from the end of this month as its cost-cutting programme gets underway, City A.M. has learned.

The bank wants to make savings of £1bn by the end of the year, and this move should contribute up to £65m towards that goal.

All of the roughly 11,000 temporary staff across the bank will be affected, in areas including IT and accounting.

Contractors make for quick savings at the bank as their notice period is typically only one week.

Staff have been told the 10 per cent cut will come in by the end of this month.

“We continually keep costs under review, in reaching this decision we have taken into consideration market day rates and those across the banking industry,” said a spokesperson for the bank in a statement.

The wider programme of cost savings will see RBS’s seven divisions cut to three in a series of moves that could see the bank reduce its headcount by as much as 40,000 over the coming years.

Chief executive Ross McEwan wants the brunt of the changes to fall on back-office and administrative staff, rather than those serving customers directly.