Trade unions and senior management at Ulster Bank are to hold talks tomorrow after the lender announced plans to cut 950 jobs.

Ulster Bank said this morning that some 600 of the jobs would be lost from its operations in the Republic with the remainder of the redundancies coming from its Northern Irish staff.

The bank said the job cuts will be voluntary, though it may move to impose compulsory redundancies if there is insufficient take-up of the scheme. The redundancy programme is expected to be completed by the end of the year.

"As local and global economies continue to deteriorate, these actions are being taken as part of the bank’s overall business strategy to ensure the organisation is well placed to compete effectively in the market," Ulster Bank said in a statement.

A spokesman for the Irish Bank Officials Association, which represents the majority of staff at the bank, said the union would be holding talks with Ulster Bank senior management in the morning.

Ulster Bank, which is owned by Royal Bank of Scotland, said the fresh cuts had arisen from a review of the bank's operating model but the union said it would be challenging the figures put forward by the company and working to ensure staff remaining with the bank would not be adversely affected by the decision.

He expected the discussions to continue for some time.

Staff leaving Ulster Bank's head office in Dublin yesterday said they had been told not to talk publicly about the job cuts.

One staff member did say however that employees had been awaiting the news and had reacted reasonably well to it.

"People were expecting what we were told and so it hasn't made a major difference. We all have a job to do and hopefully we can carry on and hope for the best," he said.

Ulster Bank operates 236 branches, 59 business banking offices and over 1,200 ATMs across the island of Ireland.

Sources at Ulster said that the bank is seeking to cut costs by €80 million, with €60 million of that to come from its payroll while the balance will come from savings made elsewhere in the organisation.

The announcement is the first in a series of large-scale redundancies expected in Irish banks this year. AIB, the country’s biggest bank, is likely to reveal plans to cut its workforce by 2,000 over the coming months.

Minister of State for Finance Brian Hayes, said the Ulster Bank redundancies were inevitable given the scale of losses in the banking sector worldwide.

“It’s obviously a dreadful blow to the workers. Government will do everything it can, given the fact that this is not a covered institution, to make sure that the negotiations between workers and bank officials produce some result,” he told RTÉ radio. “It’s a difficult outworking of the financial crisis."

Ulster Bank is a subsidiary of Royal Bank of Scotland, which is 84 per cent owned by the British government. The Scottish bank needed a £45.5 billion (€54 billion) cash injection from the British exchequer to bail it out in 2009. Close to £20 billion has been wiped off that investment by this week.

Earlier today RBS announced around 3,500 job losses over the next three years. The bank will exit from cash equities, corporate broking, equity capital markets, and mergers and acquisitions businesses, the company said.

Ulster Bank employs more than 6,000 staff. The job cuts announced today represent around 16 per cent of the bank's workforce.

Its corporate division, which provides services to businesses rather than consumers, is likely to bear the brunt of many of the proposed cuts.

Siptu, which represents over 200 Ulster Bank employees, said workers were shocked at the scale of redundancies being sought by the bank.

“Siptu members will not accept compulsory redundancies, nor will we accept any out-sourcing of jobs. Redundancies must only be on a voluntary basis and severance terms must reflect industry norms,” section organiser Adrian Kane said.

Larry Broderick, general secretary of the Irish Bank Officials Association, said his members were shocked by the scale of the job cuts being proposed by management.

“While we anticipated that the bank would seek some restructuring of its operations in view of the continuing difficulties in its business performance, the sheer magnitude of this second wave of proposed redundancies is breathtaking,” he said.

He said the union would try to protect as many jobs as possible and ensure that any cuts were implemented on a voluntary basis. Mr Broderick said the union would also seek to retain the terms and conditions of the staff who remained with the company.

“IBOA will also seek further clarification from Ulster Bank's parent, RBS, as to its continuing commitment to its Irish operations in the light of these restructuring proposals," he said.