Royal Bank of Scotland Plans Up to 9,000 Job Cuts

LONDON — The Royal Bank of Scotland said on Tuesday that it might cut as many as 9,000 jobs worldwide as the troubled British bank, which is majority-owned by the government, sought to reduce costs and repay government funds.

And as expected, the British government increased its stake in the bank to 70 percent on Tuesday from 58 percent after investors shunned a share sale offer that expired Monday, leaving the government to purchase the unsold shares.

The job cuts would affect back-office operations and would add to the 2,700 already announced in Britain for this year. The bank said the actual number of layoffs would be lower than 9,000 because “natural turnover” and “less use of agency staff” would further help to limit job losses. In addition, the bank said it had already identified 650 new job opportunities in Britain.

“We have set a new strategy for R.B.S. to restore the bank to stand-alone strength as soon as practicable,” the chief executive, Stephen Hester, said in a statement. “From this we want the government to be able to realize value from its investment in R.B.S. To do so, we need to cut our costs, as in all businesses given the current recession.”

The bank, which reported the biggest loss in British corporate history for last year, is in talks with unions about the job cuts. The layoff would help save £2.5 billion($3.7 billion), over the next three years.

Unite, Britain’s largest trade union, criticized the decision to cut jobs in the back office, saying the employees are “totally blameless for the current position which R.B.S. is in, yet they are paying for the mistakes at the top of the bank.” The union called on the government to “defend jobs and act urgently to put in place a clear program of action to protect jobs in this country.”

“This bank, which is majority owned by the taxpayer must not be allowed to shed jobs and leave people on the dole,” it said.

The job cuts are planned in the bank’s Group Manufacturing unit, which combines back office functions like the handling of computer systems, managing the properties of branches and offices, procurement, security and fraud and human resources. The unit employs 45,000 people worldwide, or 26 percent of the total work force, and 27,000 in Britain.

Unemployment in Britain could reach 3.2 million by the third quarter of 2010, The British Chamber of Commerce said on Tuesday in its quarterly survey. There are some signs that the services industry might improve but there is “more pain to come” from the manufacturing sector, the survey said.