RBS, Morgan Stanley and UBS to axe 6,500 jobs

Royal Bank of Scotland, Morgan Stanley and UBS are cutting more than 6,500 jobs in the latest blow to the ailing financial services industry.

RBS said it was in consultation with staff over plans to make 2,300 UK employees redundant. The cuts will affect about 2pc of UK staff.

Morgan Stanley kicked off its latest redundancy programme as part of a global restructuring that will see as many as 2,000 staff lose their jobs, hundreds of whom are likely to be UK based.

The majority of the RBS and Morgan Stanley redundancies are expected to come from back-office operations.

UBS said it would axe a further 2,200 jobs in its troubled investment bank. The Swiss institution expects staff numbers in the division to have shrunk to 15,000 by the end of this year, down from 26,000 in October 2007.

RBS, which claimed compulsory redundancies would be kept to a minimum, said the cuts would not affect customer-facing branch staff.

"It is essential that we consistently review our business to ensure that we are able to operate as efficiently as possible, especially in the current economic circumstances," said Alan Dickinson, chief executive of RBS UK.

"Staff have given everything they have over the last year, which makes the decision to cut any job an extremely tough one."

Banks have been forced to reduce headcount sharply as business has dried up and the global recession has intensified.

A Morgan Stanley spokesman said: "We are continually evaluating business conditions in an effort to be right-sized for the current environment."

The US bank has already made 8,680 – or about 6pc – of its global workforce redundant. RBS has cut about 3,950 jobs.

The redundancies come as Deutsche Bank became the latest investment bank to announce a sharp fall in bonuses. Staff were told the size of their bonuses yesterday with the average payout down 60pc year-on-year.

The job cuts are not confined to banks. City law firm Lovells has revealed plans to cut up to 94 staff, while call-centre operator Sitel said it was making 220 employees redundant.

Luxury carmaker Bentley said it is also cutting 220 jobs and revealed all staff will take a 10pc pay cut.