Union fury as RBS axes 9000 more jobs

The job losses will fall on call centres, document processing, information technology and property services. They will occur across the country — hitting major cities including London, Manchester, Bristol and Manchester — and cover both RBS and NatWest.

The cuts were condemned by banking trade union Unite. National officer Rob MacGregor said: "Unite is appalled that thousands of people, who form the backbone of the RBS operations, are to be made redundant. These employees are totally blameless for the current position RBS is in, yet they are paying for the mistakes at the top of the bank.

"The Government must defend jobs and act urgently to put in place a clear programme of action to protect jobs in this country. This bank, which is majority owned by the taxpayer, must not be allowed to shed jobs and leave people on the dole."

He called on the Government, which today raised its stake in RBS from 58% to 70%, to intervene to prevent the cuts in "the lifeblood of the bank".

The division, known within RBS as Manufacturing, is the biggest employer in RBS with some 27,000 staff in the UK. It is a cost rather than profit centre and last year cost the bank £1.2 billion.

RBS chief executive Stephen Hester said: "We have set a new strategy for RBS to restore the bank to standalone strength as soon as practicable.

"We want the Government to be able to realise value from its investment in RBS. To do so, we need to cut our costs, as in all businesses, given the current recession. Unfortunately, that means difficult decisions about jobs as well as many other cost-reduction actions.

"We want to be as open and transparent as possible, and are announcing these plans at the earliest possible opportunity so that our employees can prepare for the future."

RBS said it hoped to keep the number of compulsory redundancies as low as possible. The jobs will be lost over the next two years and are part of Hester's plan to reduce costs by £2.5 billion.

The taxpayer's stake rose after other shareholders shunned RBS's share placing and open offer. The deal converted the Government's £5 billion of preference shares into ordinary shares, offering the new shares at 31.75p — more than 10% above today's price of 27.8p. By removing the preference shares, RBS saves itself some £600 million a year in interest payments to the Government.

It will also make it easier to resume dividend payments on the ordinary shares in the future. The taxpayer stake in the bank could eventually rise as high as 95%.

The news came as BP's chairman, Sir Peter Sutherland, faced calls for his resignation amid claims that his senior role at RBS raised doubts over his suitability. Lobby group PIRC said BP investors should oppose the reappointment of Sutherland as chairman over his role as non-executive director of RBS.

It drew attention in particular to Sutherland's role on RBS's remuneration committee, which approved the controversial £703,000 pension for the former chief executive Fred Goodwin, who presided over RBS's near-collapse.