What future for RBS staff?

The 3,250 employees housed in Royal Bank of Scotland's Edinburgh headquarters are understandably on tenterhooks at the moment. With the bank's market value hitting a new low, and part-nationalisation on the cards, there is unease over what this new lack of independence might mean for jobs.

RBS shares took a nose-dive on Tuesday after concerns over its ability to fund itself, and its links with the government's 50bn rescue package. The 39% drop wiped 8bn off the bank's market value, but it has since rebounded.

RBS was also forced to deny speculation of a boardroom shake-up and categorically refuted claims that chief executive Sir Fred Goodwin and chairman Sir Tom McKillop had their heads on the block, with replacements already lined up.

The UK Shareholders Association is especially keen on a reshuffle of the top brass at RBS. Roger Lawson, director, said: "Shareholders would particularly like to see the chief executive and chairman of Royal Bank of Scotland depart in due course."

But just how bad could it get? Sandy Chen, an analyst at Panmure Gordon, says that there is mounting concern over RBS's massive exposure to defaults on complex financial instruments.

An analyst note from Morning Star paints an even bleaker picture: "A continued erosion of market confidence could have a significant negative impact on the bank's ability to obtain funding - and therefore to remain independent. We're maintaining our extreme uncertainty rating for RBS."

A loss of independence would obviously have a massive impact on its Scottish headquarters, which, if relocated or down-sized, would be a big blow to Scotland's economy as a whole - RBS and HBOS together account for 7% of the country's GDP.

Edinburgh's also one of half-a-dozen significant financial centres in Europe and the loss of these headquarters could see an exodus of talent that would severely dent its standing on the global stage.

But, as RBS has yet to announce any wide-ranging redundancies, it seems few people are willing to offer any predictions. Analysts we spoke to refused to comment on the matter, with one adding: "It's a horrible personal event if you lose your job and we wouldn't speculate on this."

RBS employees are clearly worried, though. One staff member, speaking anonymously to the Edinburgh Evening News, said: "I'm worried about my job. If we do merge with another company, then jobs will go. We know what happens when there's a merger because we've seen it with the Dutch bank. At the moment they're not replacing staff when they leave, so if we're taken over it'll be even worse."