Royal Bank of Scotland has been hit with a series of regulatory challenges that had a negative impact on its financial results. The company's recent performance is making investors nervous, so something had to be done about it.
When companies cannot achieve their financial goals, they usually reduce their expenses to right their balance sheet. The first workaround in order to reduce the outflow of money from the company would be to lay off employees. A person knowledgeable of the operations of RBS said that reducing its workforce by 15,000 employees is exactly what the company have in mind.
The Telegraph reported that RBS might find it challenging to cut 15,000 jobs so quickly especially since the company just recently laid off 10,000 employees around the globe. Losing a significant number of its workforce could hamper the company's operations and could negatively impact customer service.
RBS refused to acknowledge the rumored 15,000 job cuts, but recent reports suggest that it would be the first resort of the company in order to alleviate investor concerns over its financial results. The company has suffered £50 billion in losses since the financial crisis, and a series of regulatory issues could further dampen performance.
The Independent reported that the jobs that will be affected by the workforce reduction will be those that are administrative in nature. People who are involved in opening bank accounts could also be hit.
In the United States, RBS could potentially pay multibillion pound penalty for selling portfolios of toxic loans. The company is also facing issues with Williams & Glyn, a bank that it has been ordered to set up.
RBS is reportedly looking into several ways to meet its profit targets. However, it refuses to confirm whether workforce reduction is part of the plan.
On the other hand, President Donald Trump is working hard to make CEOs promise that they will create jobs in the United States, Jobs & Hire previously reported.