RBS to cut up to 9,000 jobs

Part-nationalized British lender Royal Bank of Scotland said it could shed up to 9,000 jobs over the next two years, including 4,500 in the UK, in an effort to cut costs.

The actual number of job losses is expected be significantly lower than this, and compulsory redundancies will be used only as a last resort, RBS said in a statement on Tuesday.

We have set a new strategy for RBS to restore the bank to standalone strength as soon as practicable, RBS Chief Executive Stephen Hester said in a statement.

To do so we need to cut our costs, as in all businesses, given the current recession.

RBS, which has already announced 2,700 job cuts since the beginning of the year, had warned on Friday that more positions would go as it strives to meet its target of eliminating 2.5 billion pounds ($3.73 billion) in costs over the next three years.

Trade union leaders condemned the latest job losses.

These employees are totally blameless for the current position which RBS is in, yet they are paying for the mistakes at the top of the bank, said Rob MacGregor, national officer at the Unite union.

Unite is appalled that thousands of people, who form the backbone of the RBS operations, are to be made redundant.

Edinburgh-based RBS said the final number of positions lost would be kept to a minimum through natural turnover and redeployment, with 650 new job opportunities already identified.

The bank said it also planned to introduce a voluntary redundancy program.

RBS, once the UK's second-biggest bank, is majority-owned by the state after spiraling losses on risky debt-backed assets it accumulated under the tenure of former Chief Executive Fred Goodwin forced it to seek emergency government support.

The state's stake in RBS on Tuesday rose to 70 percent from 58 percent after private sector shareholders largely shunned a sale of new shares, leaving the government to acquire them instead.

While RBS' move further in the direction of full-scale nationalization hardly comes as a surprise, the job cut announcement is sure to stir up another wave of public indignation, said Isable Schauerte, an analyst at financial research and consulting firm Celent.

A string of job losses as the recession tightens its grip on the UK economy pushed the internationally-recognized ILO measure of unemployment above the two million mark in January, and economists reckon it could rise above 3 million before growth resumes.

RBS has a total workforce of 170,000, of which 106,000 are UK-based.

Shares in the bank were 10.4 percent lower at 26.7 pence by 1500 GMT (11 a.m. EDT), while the FTSE 100 share index was down 1.3 percent.

(Reporting by Myles Neligan; Editing by David Cowell)