RBSI to axe 2000 jobs

Royal Bank of Scotland Insurance (RBSI) is to cut 2000 jobs over the next year.

RBSI, which incudes brands Direct Line, Green Flag, Churchill and Privilege, currently has 16,000 staff.

It comes after RBSI last week posted a 50m first quarter loss in 2010. The bank is planning to hive off the insurance arm by 2012, either through a sale or flotation.

RBS Insurance chief executive Paul Geddes said: "Pitched against an ever-competitive market, we have had to explore options that will help us to achieve greater cost efficiencies, as we head towards the divestment of RBS Insurance.

"This will enable us to deliver great value for customers and acceptable shareholder returns. I am, therefore, proposing to take action that will achieve an overall cost reduction, while maintaining our excellent customer service. Regrettably, this is likely to affect up to 2000 roles across the division over the next twelve months, including around 500 back office jobs which we are proposing to off-shore.

"However, wherever possible we will endeavour to reduce the need for compulsory redundancies. We are also reviewing our site strategy to make efficient use of our existing properties. We will now begin the process of consulting with employees and their representative bodies to discuss these plans and the details of the transformation. Whilst I appreciate we have some tough decisions ahead, I am confident that these actions will help us regain our competitive edge."

In total, 2,600 jobs will be lost. A further 600 cuts are being made in its retail banking business.