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Lay-offs loom large as the RBS axe arrives in Asia

RBS

With RBS set to lay off about 5,000 staff globally from its investment banking division, speculation is mounting that Asia will bear the brunt of the cuts.

“We have just heard that most of them will be made redundant here in Asia in Q1 and Q2,” says a headhunter who was told the news by a director at RBS in Hong Kong on Wednesday. The BBC’s business editor has similar thoughts: “much of the pain will be in Asia and North America.”

As the major regional centres, Hong Kong and Singapore are likely to be most affected. But why has Asia now been hit when other banks have focussed their recent international redundancy announcements on Western markets? “With all that has gone on in the last couple of years at RBS, it has already trimmed down Europe and the US to a minimum. Asia can no longer escape,” says the headhunter.

According to Bloomberg, everyone in cash equities will be cut, and quite possibly everyone in corporate broking and M&A. Lay-offs are likely in the back and middle office as well as the front, adds the headhunter.

But not everyone is facing the axe in Asia. “RBS won’t be getting rid of the rainmakers here, it will be cutting the fat cats on large base salaries who haven’t bought in enough business.”

And despite all the cost cutting and uncertainty, the investment bankers that RBS retains won’t be likely to defect any time soon because there are few vacancies available at other banks.

The part-nationalised firm is expected to announce Britain’s biggest corporate loss of up to £28bn on Thursday. At the same time it will outline a restructuring plan on designed to shrink its global banking and markets business in the wake of UK government pressure to rein in its former international expansion ambitions. RBS wants to contain troubled areas of its operations in a “bad bank” and let the stock market place a value on the remaining core business.

 

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