UNION leaders have attacked plans by insurance giant Direct Line to axe about 2,000 jobs, describing the cuts as “savage”.
The UK’s largest car insurer, which was spun off from taxpayer-backed Royal Bank of Scotland last year, said about 150 jobs were under threat in Glasgow as it looks to shave about £130 million off its cost base.
The proposed redundancies, which will mainly affect its head office and support functions, are on top of more than 1,200 job losses it announced last year.
Direct Line said it was in talks with affected staff and their “representative bodies”, but the Unite union said the firm had blocked it from negotiating on behalf of employees.
Dominic Hook, the union’s national officer for finance, said: “The fact that Unite, the union with the largest number of finance-sector workers in the country, has been refused recognition makes it easier for Direct Line to announce these savage cuts out of the blue.
“The government’s claim that the economy is out of intensive care will have a hollow ring for those at Direct Line who face the dole queue.”
Direct Line, which also owns the Churchill and Privilege brands, along with the Green Flag breakdown service, employs about 1,000 people in Glasgow. A spokesman said about 150 posts could be lost across the firm’s sites at Cadogan Street and Rutherglen.
The job cuts – representing about 14 per cent of its 14,400-strong workforce – come as Direct Line aims to save about £130m a year. That is up from its original cost-cutting target of £100m. However, the cuts will land the group with a restructuring bill of about £180m.
As well as closing a call centre in Teesside, the firm said it would axe sites in Croydon,
Liverpool and central London by the end of the year. Direct Line said it hoped to redeploy staff to other roles where possible, while trying to find opportunities with other potential employers for affected workers.
Chief executive Paul Geddes said: “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.”
Direct Line, which also offers home, travel and pet insurance, last month reported an operating profit of £107.5m for the first three months of the year, up from £80.9m a year earlier but short of the £111.9m forecast by City analysts.
A Scottish Government spokesperson said: “The announcement will be a major concern for Direct Line employees and their families and our thoughts go out to them.
“Through our agencies Scottish Enterprise and Scottish Development International we will be approaching Direct Line.”