Some 7,000 investment bank jobs are expected to bite the dust at ABN Amro and its new owner Royal Bank of Scotland as implementation of their six-month-old merger steps into high gear. Formal procedures for targeting those to be laid off reportedly will begin this week, and will continue over a month or two.
The Financial Times says RBS "is expected to start writing to staff just below senior management level as early as Wednesday this week, asking them to submit information about their career histories as part of a formal consultation for planned redundancies in the investment bank."
It says the absorption of ABN Amro's investment bank into RBS's global markets division is "likely" to eliminate about 7,000 jobs, or about 25 percent of the combined 28,000 workforce. Not everyone whose job is at risk will interviewed. While there is no word yet on where the cuts will be made, employees in the ABN unit fear they will suffer more than those in RBS.
Some department heads have left already. They include Justin May, head of debt capital markets, and Clive Roberts, European head of sales trading.
Thus far RBS has made "only relatively modest cuts" to ABN's investment bank since the October purchase, according to the FT. It's now getting more aggressive, as are other big banks, as the credit crunch bites more deeply. In the case of RBS, its need to raise additional capital from shareholders to pay for the ABN acquisition adds to the pressure to ramp up cost-cutting efforts.