Direct Line Insurance cuts 2,000 jobs to slash costs

26th Jun 2013 09:53

Direct Line Insurance Group's shares surged on Wednesday after announcing further cost saving initiatives.The company, which last August announced a transformation plan to improve its operational efficiency, plans to slash 2,000 jobs to achieve more savings. When the group first announced its plan, it targeted a gross annual cost savings of £100m in 2014.. With the redundancies, the company is now targeting an annual cost savings of around £1.0bn.The group has begun consultation with staff and their representative bodies. Direct Line said it would try to mitigate the impact of redundancies through redeployment.The firm's original cost savings plan included an estimate of restructuring costs of £100m while the new plans are estimated at a cost of £180m. Paul Geddes, Chief Executive Officer of Direct Line Group, said: "This is another step in the ongoing transformation of Direct Line Group 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. 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."Shares jumped 4.97% to 230p at 10:38 on Wednesday.RD