Direct Line Group plans job cuts
Published 05/09/2012 | 12:42
RBS insurance arm Direct Line Group has announced proposals to axe nearly 900 roles and close a site in the North East.
The group, which owns the Churchill and Green Flag brands and employs some 15,000 staff in the UK, is planning the redundancies as part of plans to make £100 million of cost-savings by the end of 2014.
Some 500 of the 891 roles could go under plans to close a customer services site in Stockton-on-Tees, while the other job losses are expected to be spread across the group's locations across the UK.
Chief executive Paul Geddes said: "We have not made these proposals lightly and fully understand the impact this will have on our people.
"As we have done in the past, we will be open and honest, dealing fairly and carefully with those affected."
The announcement is the latest blow for the sector after fellow insurer Aviva said recently it will cut up to 800 management jobs across the UK under a plan to save £400 million.
With taxpayer-backed RBS forced to offload Direct Line Group as a condition of its £45 billion bailout, it is widely expected the business will be floated on the stock market later this year.
Direct Line Group, which is already acting as a standalone company, revealed in results on Monday that it planned to make the efficiency savings by the end of 2014 and it admitted that job cuts were likely.
It said operating profits rose 7% to £224.2 million in the first half of 2012 and it paid a £200 million dividend to RBS, on top of an £800 million payment earlier this year. It said it was targeting the efficiency savings to improve returns for shareholders.
Staff were told that Direct Line would try to help them find work elsewhere within the group or with other employers.