RBS set to cut thousands of banker jobs
RBS is planning to lay off thousands of investment bankers over the next eighteen months as it concludes its integration of ABN Amro.
The bank could lay off some 2,000 people by the end of 2012 in its global banking and markets division.
But a source told City A.M. that it is not clear exactly where the axe will fall within the business and the final numbers have not yet been decided, so there is unlikely to be a definitive announcement on jobs during its results statement on Friday.
Analysts are expecting a slump in profits for RBS’s investment bank when it unveils its half-year earnings, with some suggesting that it could fall back into the red.
The job cuts at RBS come as rival investment banks also shed thousands of workers due to over-hiring last year followed by a slowdown in trading volumes in 2011.
Credit Suisse is downsizing its workforce by 2,000, with cuts likely to fall most heavily on fixed income and equities. Barclays is expecting to lay off 3,000 people by the end of the year, while Goldman Sachs will reduce its headcount by 1,000. HSBC has said it will cut 30,000 roles over the next two to three years, and thousands of job cuts are also expected at UBS.
At the same time, banks are having to contend with higher fixed costs due to pay regulation on bonuses. Instead of varying bonus pay-outs, banks have had to compete for staff by raising base salaries, making it harder to adjust their costs without lay-offs.