Part-nationalised lender Royal Bank of Scotland is axing up to 4,500 jobs in an effort to save £2.5 billion.
The beleaguered bank will make the cuts from back-office functions over the next two years as it seeks to bounce back from a £24.1 billion loss in 2008.
RBS, which employs hundreds of West Midlands staff, including at branches on Union Street, New Street and Colmore Row, in Birmingham, would not say where the redundancies would take place.
The cuts will affect its group manufacturing division, which employs document processing, information technology, procurement and bank property staff.
A further 4,500 workers will be axed from operations outside the UK, in a move described as “devastating” by union leaders.
Meanwhile, the taxpayers’ stake in the company has risen above 70 per cent after investors snubbed a £5 billion shares offer.
RBS, which hopes to save £2.5 billion in the next three years, said job losses were likely to be lower due to natural turnover, fewer agency staff and voluntary redundancies.
An RBS spokeswoman said she could not reveal the impact on the West Midlands, but said branch staff were not expected to be affected.
She said: “We are not able to give any sort of regional breakdowns at this stage as this is the beginning of a consultation process which is going to take two years.” The group manufacturing division has bases across the UK, including Edinburgh and London, but the impact of the cuts is likely to be widespread.
RBS, which has 106,000 UK employees, has already announced 2,700 job losses in the UK this year from its corporate division.
Since the start of the credit crunch, it has now announced about 15,000 jobs worldwide would be shed.
The group has amassed huge losses and seen its share price fall more than 90 per cent in a year as a result of exposure to the wholesale capital markets.
Chief executive Stephen Hester said the job losses were necessary to put the bank back on its feet “as soon as practicable”.
He added: “Unfortunately, that means taking difficult decisions about jobs as well as taking many other cost reduction actions. We want to be as open and transparent as possible.”
Rob MacGregor, national officer of the Unite union, which represents RBS workers, said they were being made to pay for directors’ mistakes.
He 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 which 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.”
The Government’s stake in RBS soared after only 0.7 per cent of shares were taken up after a £5 billion offer.
The cool response from investors had been expected as the bank’s shares have consistently traded beneath the 31.75p offer price since January.
It comes after rival HSBC raised £12.5 billion earlier this week from a well-subscribed rights issue.
Furious RBS investors overwhelmingly voted against its remuneration report last week following controversy over former chief executive Sir Fred Goodwin’s £700,000 a year pension.
It is possible the State’s economic interest in RBS may rise as high as 95 per cent after a deal to dump more than £300 billion in “toxic” assets.