STAFF at Royal Bank of Scotland in Edinburgh are bracing themselves for further massive job cuts as the part-nationalised business seeks to trim costs by an estimated £1 billion.
The Capital-based bank is said to be preparing to axe thousands more posts following a pre-tax loss of £720 million at the end of last year.
An announcement is expected to be made within the next six weeks.
Around 40,000 workers have already lost their jobs since RBS was bailed out with £45bn of taxpayers’ money in 2008.
New RBS chief executive Ross McEwan has been carrying out a full review of the bank’s business.
And the new cost-cutting measures are expected to be finalised when RBS’s annual results are revealed at the end of next month.
Senior sources were today reported saying the job losses were likely to be “very substantial”.
It is understood the chief executive wants to shrink RBS’s international operations and introduce greater automation to high street banking services.
The shake-up plans are said to have been given the codename Project Cook, understood to be a reference to Captain James Cook, the English explorer who sailed along the coast of Australia in 1770, and is a nod to Mr McEwan’s success in cutting costs at Commonwealth Bank of Australia, where he ran its retail operations for five years until August 2012.
RBS’s operating costs currently stand at £10.06 billion and it is believed the plan is to cut that by as much as £1.25 billion. More than half of the bank’s costs are made up of staff salaries.
In November last year, RBS – which currently employs around 120,000 people – avoided demands for a full carve-up of the bank when a government report called for soured loans and toxic assets to be placed in an internal “bad bank”, arguing that it would improve lending to businesses.
The bank RBS confirmed plans to hive off £38bn of troublesome loans into a new non-core division to be known as the capital resolution division, which the bank aims to wind down in three years.
Unions have been expecting a new wave of job cuts on top of the 40,000 already axed.
RBS decline to comment on the potential cuts.