Royal Bank of Scotland Prepares for Massive Layoffs
Royal Bank of Scotland (NYSE:RBS) is considering shutting down more than half of its Global Banking and Markets division, including offloading renowned stockbroking business Hoare Govett as the 83 percent taxpayer-owned bank considers a complete closure of its equity business. Foreign exchange trading and swaps are thought to be among the GBM strands RBS is likely to retain.
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Last week, the RBS board discussed options for restructuring, advised by consultants from McKinsey. The GBM division’s 18,900 staff have been warned to prepare for large-scale redundancies and consequently layoffs as RBS reduces the GBM balance sheet from 450 billion pounds to 200 billion pounds, a fraction of the 1 trillion pounds it boasted before its 2008 bailout.
One senior source in the discussions said: “The Government was prepared to go along with keeping the investment bank going when markets were looking better…but they’re not prepared to keep things going in their present form.” The worsening macroeconomic climate has dashed hopes of returning RBS to the private sector in the short term.