Company proposes closure of 500-strong Teesside operation

Paul Geddes, Direct Line Group

Direct Line Group is to consult with around 891 staff about redundancies as part of the first phase of its £100m cost-cutting drive.

As part of the staff cuts, the insurance group is proposing to close its Teesside operational centre, which employs 500 people.

The remaining 400 potential job losses will come across the entire geographic footprint of the business and will affect three business areas.

The proposed job losses are part of the cost-cutting drive Direct Line Group announced with its first-half results on 3 August, where it aims to slash £100m of costs from the business by 2014.

While the cost cuts will come from a variety of areas, including savings on procurement, marketing and buildings spend, Direct Line Group chief executive Paul Geddes warned after the release of the first-half results that jobs would be at risk.

Direct Line has confirmed the cuts and said that the three areas affected will be sales, service and partnerships, commercial and the chief operating office.

The insurer said it has begun full consultation with the affected employees and their representative bodies, and will continue to consult throughout the process.

The company also said it aimed to mitigate the effect of the redundancies on staff through redeployment of roles and identifying opportunities with other potential employers.

Geddes said in a statement: “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.”

Direct Line Group is working towards separation from its current parent, Royal Bank of Scotland, and is aiming to float part of the business this year.