Needless to say, RBS is cutting lots of jobs. Over the next two years it will be eliminating 9,000 posts, of which half will go from the UK. The cuts are to be entirely focused in the 'manufacturing division,' which according to the bank's annual report is only call centres and IT support
'supports the customer facing businesses and provides operational technology, customer support in telephony, account management, lending and money transmission, global purchasing, property and other services. '
RBS is the cutting jobs because it needs to save money - 2.5bn to be precise. However, if saving money is the focus, call centre jobs doesn't seem the best ones to be trimming.
In 2008, the average salary paid to RBS's 44,900 manufacturing employees was 26.6k. By comparison, the average amount paid to RBS's 20,900 global banking and markets staff was 133k.
If global banking and markets were forced to bear the full force of the banks' 2.5bn cost cutting programme, 18,000 jobs would have to go. This isn't going to happen - RBS remains committed loans, bonds, FX, rates, commodities and equities.
However, (and as we've said before) very big cuts in GBM seem inevitable. Today's cuts are unlikely to be the last: MarketWatch reports that redundancies will be announced on a division by division basis as plans are finalized.
In reducing its manufacturing headcount by 9,000, RBS will save around 240m. That leaves 2.3bn of cost savings still to go.