It's not a good day to be working for RBS at Gogaburn. As has been widely reported, the bank is scrapping 120 posts at its Edinburgh head office (and 95 elsewhere) whilst creating 250 new jobs in India. A further 83 temporary staff in the UK are having their contracts terminated. The move will mostly affect accountants working in the finance division, including Edinburgh-based accountants providing finance services to RBS's investment bank.
The UK-based cuts may not come immediately. "We have embarked upon a three-year transformation programme across our finance division which will increase efficiency and allow us to serve our customers better," RBS said.
Unions are predictably outraged, and have called the move, "outrageous," pointing out that many of RBS's Scottish accountants are only earning £22k and are therefore not particularly expensive compared to investment banking staff in London.
Why is RBS trimming in Scotland and growing in India? It undoubtedly helps that the maximum salary for an accountant in Mumbai is around £11k. RBS also claims that it needs to be, 'near its customers.' Nevertheless, the move looks unusual. At the eFinancialCareers roundtable for heads of recruitment in London last week, banks' senior recruiters said offshoring jobs to India was out of favour because of problems recruiting and retaining staff. Instead, the trend is for 'near-shoring' to locations in the UK.
While banks such as JPMorgan and Morgan Stanley follow the near-shoring trend and create jobs in Scotland, it seems ironic that Scotland's leading bank is going against the grain and moving roles overseas.