Thousands of insurance staff were sacked by text messages today. The bulk of the 2,500 jobs were at the Manchester–based personal injury claims firm The Accident Group.
The redundancies came after The Amulet Group, The Accident Group's parent company, called in administrators.
Today, employees at The Accident Group, which in the past has been accused of aggressive selling methods, were told of their fate by a text message with a number to ring at head office.
An answer machine message from administrators PricewaterhouseCoopers (PwC), said: "All staff who are being retained will be contacted today.
"If you have not been spoken to you are therefore being made redundant with immediate effect."
It added: "Unfortunately there are effectively no funds available to pay the salaries for May."
Staff have been told to make claims for arrears of pay, outstanding holiday pay, pay in lieu of notice and redundancy pay to the DTI.
The message said letters would be issued to redundant employees later today.
It tells employees to return office keys and says that those with company cars will be contacted to arrange the return of the vehicle.
The message says: "I must apologise for the nature of this call. I would have preferred to have done this on a face–to–face basis.
"On the time scale available, this has not proved possible."
The wife of one employee at The Accident Group, who did not want to be named, said: "It's a very cowardly way of doing something and very unfeeling.
"Unfortunately, it is not all that surprising given the sort of treatment my husband has had in the last 15 months.
"He had a telephone call from his manager last night on his mobile saying 'it's all going down'.
"But he then rang to say it might not. Later he rang again to say it was looking bad.
"The only reason my husband had this call was because they have a good personal relationship.
"Other colleagues didn't have this contact. The first they knew of it was the text message."
She said: "My husband doesn't know what he's going to do. At 54 he's on the scrapheap and he can't pay this month's bills. It's very difficult."
The Amulet Group provides financial and advisory services. Other companies in the Group include the Accident Investigations Limited and Claims Support Services Limited, which provide ancillary services, and First Advice Limited, which provides financial services and products.
However most of the jobs are thought to be going within The Accident Group.
Amulet's company statement described the job losses as a "tragedy" and says that The Accident Group had partly "been a victim of its own success".
"As market leaders in personal injury compensation, the company had been instrumental fulfilling the Government's wishes in providing the general public with direct access to justice.
"This has been achieved at considerable cost to the company. Since this new industry was created three years ago, The Accident Group, as market leaders, has had to battle on many fronts, particularly against the insurance industry, which Lord Justice Brook described in the Court of Appeal last week as engaging in bitter trench warfare.
"These difficulties have been a considerable drain on company resources and inhibited severely the natural development of the company," it said.
In November last year the High Court ruled in favour of The Accident Group and upheld the validity of a central aspect of a leading "no win, no fee" personal injury compensation scheme.
A former line manager, who asked not to be named, said the company had treated its staff with contempt by not notifying them of what was happening face to face.
He said he received two messages to his company phone before 9am today. The first read: "Any staff who have not received an official briefing over the future of the company should ring 0161 605 5966."
A second text message read: "Message urgent: please check your email for salary news."
At a meeting with the board of directors, staff were then told they would receive a letter in the post informing them who was being made redundant and who should turn up to work as normal on Monday.
"There is a sense of overwhelming disgust," he said. "The majority of people are not that bothered about the jobs, it is the money issue and the way they have gone about it.
"They are treating their staff no better than something you would find on the bottom of your shoe."
The former head of corporate affairs at the Accident Group, Clive Entwistle, said he received the text message saying he had not been paid.
He cut short his holiday in Wales to return to work and was officially made redundant this morning.
"This was a decision by the administrators," said Mr Entwistle. "It was considered by them that the best way to inform them that salaries were not being paid would be to send a text message.
"Because people had received their pay slips before they would expect that money to go into their accounts today, and because that was not going to happen, they took the decision to inform staff by text message," he added.
The job losses came in the wake of personal injuries specialist Claims Direct going into receivership last year with millions of pounds of debt.
The move left 140 jobs hanging in the balance after the Telford–based firm was nicknamed "Shames Direct" in the press.
Its share price plummeted after clients complained that their "no win no fee" compensation payments were being wiped out by the cost of buying compulsory insurance to cover any potential defeat in the courts.
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