Lloyd's intends to reduce its administrative costs from pounds 144.5m to pounds 117.9m. The cuts will bring down staff numbers from their present levels of around 2,000. Next week, employees will be told where the cuts will be made by Peter Middleton, Lloyd's newly appointed chief executive, who earns pounds 250,000 a year.
Mr Middleton stressed that the cuts would come largely through natural wastage and voluntary redundancies. 'Compulsory redundancies will be kept to an absolute minimum,' he said.
Already, the threatened lay-offs have caused intense anger within Lloyd's and an erosion of morale among the workforce. Staff point out that the ruling council is costing more than pounds 1m, including fees paid to council members.
Mr Rowland, chairman-elect until January when he formally takes over from David Coleridge, said yesterday: 'I am a new boy. Whatever the problems ahead, I am delighted to be tackling the job.'
He is relinquishing his present job as chairman of Sedgwick Group, Britain's largest independent insurance broker. In order to secure his services as chairman, Lloyd's has decided to match his salary and remuneration package at Sedgwick.
Mr Middleton said that the 1993 expenditure level for the corporation, the market's administrative hub, had been set at pounds 117.9m, compared with pounds 144.5m for 1992.
'We will achieve the required savings from sensible economies, better working practices and, inevitably, a reduction in the corporation's headcount,' he explained.
He said that a report prepared by Mr Rowland earlier this year had estimated that Lloyd's expenses 'were about 30 per cent too high'.
'While much of the required reduction will come from greater efficiencies and cost reductions in business transactions and in servicing the deployment of capital, the Corporation of Lloyd's also has a vital part to play,' Mr Middleton added.Reuse content