UK IT staff spared as RBS slashes costs

The Royal Bank of Scotland is expected to cut thousands of jobs as part of a restructuringthat will see it scale back operations and reduce operational costs by £2.5bn.

The Royal Bank of Scotland is expected to cut thousands of jobs as part of a restructuringthat will see it scale back operations and reduce operational costs by £2.5bn.

But UK IT workers could be spared as the bank focuses on its retail operation in Britain.

RBS reported aloss for 2008 of £8.13bn before write-offs, which are significant. The government has agreed to inject up to £25.5bn into the troubled bank.

There is speculation that the bank could cut more than20,000 staffas part of its restructuring.RBSwill now focus on the UK retail banking market,sothe countrywill avoid the majority of cuts.

RBS announced earlier this month it was cutting 2,300 jobs across its back-office operations in the UK as it scales down its business in response to the ongoing financial crisis.

The bank's manufacturing division, which is responsible for IT, spent £1.75bn on technology services and support last year.

Ralph Silva, analyst at Towergroup, expects about 25,000 people to lose their jobs. "These will be staff working in RBS's foreign operations."

He said the fact that the bank plans tosell most of its non-UK assets means its IT spend will probably fall by about 20%.

IT jobs and spend in the financialsectorhave been hit hardbythe credit crunch, because falling business volumes need less IT to support them. Additionally, companies are holding back investmentin IT projects.

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