Direct Line Insurance, the biggest motor insurer in the UK, has announced it will be cutting 2,000 jobs across the country in order to reduce its costs.
The organisation had originally announced in August 2012 that it was planning to reduce it's annual costs by £100 million every year, but has now doubled this to £200 million in savings by 2014. The firm, which also owns the Churchill and Green flag brands, has already cut 1,200 jobs in the past nine months.
Three sites are to close, including an office in Liverpool that employs 500 people, some of whom will be able to keep their jobs if they are willing to work in Manchester.
An office in Croydon, employing 240 people, mostly in IT, will also close, though 160 of the posts will move to Direct Line's headquarters in Bromley.
The insurer which left the Royal Bank of Scotland in October last year after a flotation, said the decision was partly to assert its independence from the bank, whose stake is now valued at less than 50 per cent of Direct Line.
Investors welcomed the move. By the end of the day shares in the bank were trading 3.79 per cent higher at 227.40p per share.
Direct Line, which is currently consulting with unions and staff members over the job cuts, has suggested that those in support functions and head office will be the most affected by the changes.
Chief executive Paul Geddes said the savings were "an important part of our aim to regain competitive edge". Mr Geddes added: "We have not made these proposed changes lightly and understand the impact they will have on our people."
The cuts are estimated to affect 14 per cent of the 14,400 people who currently work for the insurance firm across it's 16 locations in the UK; cities such as Leeds, Manchester, London and Glasgow.
Direct Line has faced major financial turmoils in the past few years, with it having been spun off from RBS in 2012, as part of the bank's £45 billion bailout from the UK government. RBS still owns 48.5 percent of the insurer but must sell its entire stake by the end of 2014. Furthermore, the firm's call centre in Teesside will be closing next week.
Good news to come out of all of this was the company had seen a boost of £94.3 million in profits in the first quarter of 2013; a rise of 47 per cent compared to the same period in 2012.
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