Page last updated at 06:28 GMT, Friday, 14 November 2008

RBS to cut 3,000 jobs worldwide

Royal Bank of Scotland branch
The bank has been hit hard by the global financial crisis

Royal Bank of Scotland (RBS) is to cut about 3,000 jobs in the next few weeks, the BBC has learned.

The positions will go in its global banking and markets workforce, spanning more than 50 countries. Jobs are likely to go in the City of London.

It is understood the bank's High Street operations, and those of subsidiary NatWest, will be unaffected.

RBS, which predicts its first annual loss this year, may get up to 20bn from the government's bail-out plan.

Paying the price

The bank employs about 170,000 people, of which roughly 100,000 are in the UK.

RBS declined to comment in detail on the job cuts. "We constantly review our operating model to make sure it is appropriate to the market condition, and take action accordingly."

"RBS is paying the price for lending far too much in the good times," says BBC business reporter Nick Cosgrove.

We constantly review our operating model to make sure it is appropriate to the market condition

"It had too much exposure to the sub-prime market in the United States and it overpaid for the giant Dutch bank ABN Amro at the height of the boom."

Sub-prime loans are those to people with poor credit records. An RBS consortium paid 71bn euros ($91bn; 61bn) for ABN Amro in October 2007.

Job cuts

The news of RBS's cuts comes within 24 hours of BT saying it will cut 10,000 posts by March next year.

Employment Minister Tony McNulty: 'It's difficult and is going to get more difficult'

Recent days have also seen Virgin Media, Yell, GlaxoSmithKline and JCB announce a total of more than 5,000 job cuts.

Official figures this week revealed UK unemployment in the three months to September was at an 11-year high of 1.82 million.

Meanwhile, Prime Minister Gordon Brown will join a meeting of 20 world leaders in Washington this weekend for a summit on the global economic downturn.

Losses mount

Earlier this month, RBS announced it expected to reveal its first full-year loss in its almost 300-year history.

The announcement followed a 691m loss in the first half of the financial year.

The bank also detailed plans to raise up to 15bn from investors by selling shares at 65.5p each. If the shares are not taken up, the government will acquire them.

The government will also directly buy preference shares in the bank - worth a total of 5bn.

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