IT job cuts are inevitable as theRoyal Bank of Scotland (RBS) integrates its wholesale
banking divisionand theUK operations of ABN Amrowhich it
acquired last year, say industry analysts.
RBS headed a consortium which bought ABN Amro for £49bn last
year. RBS acquired its global wholesale and international retail
businesses.
RBS warned there will be job cuts as it
merges its own and ABN Amro's wholesale banking arms in the UK.
It said there could be more than expected
because of the economic downturn.
An RBS spokesperson said, "Since the acquisition of ABN Amro, we
have consistently said that, as we brought our two wholesale
banking businesses together, there would be job losses over the
next two years.
"In light of current conditions in some parts of the global
credit markets we are also looking at the appropriate size for our
businesses affected by this downturn."
Phil Morris, managing director Europe at sourcing consultant
Equaterra, said RBS will have to make IT job cuts but those with
specialised IT skills will be least affected.
"There are bound to be some cuts and the biggest potential cuts
are in areas that are not about IT skills but IT support functions
such as procurement and service management," he said.
He added that
ABN Wholesale outsources a significant part of its IT to EDS.
"Many people at ABN Amro are involved in the EDS relationship," he
said.
Ralph Silva, analyst at TowerGroup, said the merged company will
have more business and a bigger workload but its IT department will
be overstaffed. "The incremental increase in resources that the IT
platform will require to serve the additional customers will not
equal the total number of IT staff."
He said whether ABN Amro or RBS IT workers go will depend on
which technology the bank goes forward with. "The big question for
RBS is 'which of the two IT infrastructures is superior?'"
But he said the bank does not have long to dwell on this and
will have to complete the IT integration process as quickly and at
as low a cost as possible given current market conditions.
This could come at a cost, he added. "The best way to do this
would not be to look at the platform in its entirety but each
application which requires a lot of effort."
He said tens of thousands of applications are involved but if
they do not look at them individually they will not get the
best.