The Royal Bank of Scotland is to close its Direct Line insurance business at Atlantic Quay and pull out of offices on St Vincent Street, shedding 440 posts.
The state-owned bank yesterday announced 2000 redundancies across its insurance arm.
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Although 640 staff will be hit by the closures in Glasgow, about 200 are likely to be redeployed to RBS’s premises on Cadogan Street.
Shocked workers were told of the closures at a meeting in Atlantic Quay yesterday afternoon. Earlier, many had been under the impression that the redundancies -- first revealed in May -- would be shared between Glasgow and Edinburgh.
Some shed tears and comforted one another as the news sunk in. “Where am I going to get another job?” sobbed one woman. Others were angry at how swiftly the blow was delivered.
However, under an order from the European Commission, RBS has no choice but to sell off its insurance division by 2013.
The sale was a condition of the £54 billion handout of public money that saved the bank in 2008.
As well as the closures in Glasgow, staff will be lost in 12 other offices, including Birmingham, Cardiff, Bristol, Manchester and Romford, while 660 employees in Peterborough will also be affected.
Rob MacGregor, national officer at trade union Unite, said it was unfair that staff were “continuing to pay the price for the bank’s failure with their jobs”.
Finance Secretary John Swinney described the redundancies as hugely disappointing.
“Although these will take place over a period of time and the bank has pledged to avoid compulsory redundancies where possible, this is still a significant setback for Glasgow’s financial sector,” he said.
Pauline McNeill, Labour MSP for Glasgow Kelvin, said the jobs cuts were “a devastating blow for Glasgow and the hundreds of staff concerned.” She added: “It is particularly hard to swallow given RBS has returned to profit, which is in no small part down to the efforts of the workforce.
“I urge RBS to work with the unions and do all it can to retain and redeploy as many staff as possible.”
However, Owen Kelly, chief executive of Scottish Financial Enterprise, said the closures were indicative of change in the financial services sector as a whole. “It is always regrettable when job losses are made in any industry, but we need to look at this in terms of the wider current situation in the financial services sector, which is undergoing a shift in the areas of job demand,” he said.
RBS could not confirm where the axe would fall next as it restructures its global business.
A spokeswoman said: “At this stage it is too early to say how many role reductions this will involve, but we will do all we can to support staff, offer redeployment where possible and to keep compulsory redundancy to an absolute minimum.”
RBS has already said it aims to reduce the number of roles in the group by 23,100 worldwide. About 17,100 of these will be in the UK.
Scotland’s financial services sector has already taken a pounding during the past two years, with about one in six posts lost. The Scottish Government said an average of 95,500 people were employed in the industry during 2008.
However, recent figures from PricewaterhouseCoopers and the Fraser of Allander Institute suggest that 16,500 workers will have been shed between then and the end of 2010.
Labour pledge to save ‘under-threat’ posts
Labour has vowed to battle to save 165 jobs, one-third of the workforce at the Department for International Development (DfID) in East Kilbride, which it claims are under threat as part of the Government’s cuts programme.
Michael McCann, the local MP and a former worker at the DfID offices in South Lanarkshire, said through local contacts he had uncovered evidence of Secretary of State Andrew Mitchell’s submission to Chancellor George Osborne, who asked colleagues to come up with departmental savings of anything up to 40%.
Mr McCann suggested the Government was preparing to sacrifice Scottish jobs to protect those in Whitehall and claimed party political considerations were also behind proposals to cut jobs in East Kilbride, where neither the Conservatives nor the Lib Dems have much support.
He said: “Andrew Mitchell’s proposals are a low blow. Clearly, his decision has been heavily influenced by the same London-centric mandarins who for years blocked the transfer of civil service jobs from London to other parts of the UK.” .
Unions told The Herald that staff were extremely distressed by the job cuts speculation.