Insurer DirectLine to cut 2,000 UK jobs - on top of the 1,200 from last year

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DirectLine, the insurance giant that owns Churchill and Green Flag, has announced it will cut a further 2,000 British jobs in addition to the 1,236 posts it axed last year.

The insurer, which had to be spun out of the taxpayer-controlled Royal Bank of Scotland last year on European regulator orders, said it needed to make the cuts to “regain competitive edge”.

The job cuts will come largely at its head office in Bromley and across support functions including human resources, risk, communications and finance. Consultations with staff and unions began today. Just over 500 jobs will go at Bromely and another in Croydon.

DirectLine said the cuts would help to ensure that its cost base comes down to £1bn by the end of 2014 which is £130m less than the 2011 figure. The cost of making the cuts including redundancies, onerous property leases and transferring away from RBS computer systems to its own new ones would total £440m by the end of 2014. Half of that will fall this year.

The chief executive Paul Geddes said: “This is another step in the ongoing transformation of DirectLine and an important part of our aim to regain competitive edge. While we continue to invest in the business with the aim of winning in a market which is changing fast, it’s clear that we need to become more efficient to deliver the good service and value our customers expect.”

A DirectLine spokewoman said: “We are still built like a bank and we need to be built like an insurance company. Since the flotation away from RBS we have taken full control of our own cost base.”

Geddes added: “We have not made these proposed changes lightly and understand the impact they will have on our people. As we have done in the past, we will deal fairly and carefully with those impacted, and do all we can to support them through these changes.”