Ipswich: Jobs threat as Churchill owner Direct Line reveals plans for further cuts

Churchill's dog mascot, which features in its TV adverts

Churchill's dog mascot, which features in its TV adverts - Credit: PA

Around 2,000 jobs are under threat at Churchill owner Direct Line Group after the insurance giant revealed plans to ramp up cost-cutting.

Direct Line, the UK's biggest motor insurer, said staff across head office and support functions were expected to be the main areas impacted in the latest round of redundancies.

A spokesman for the group confirmed that the Churchill office in Princes Street, Ipswich, was among the locations likely to be affected, although he said the number of role as risk was likley to be fewer than 20 out of a total staff of nearly 500.

Direct Line said it hoped to redeploy staff where possible and find opportunities for affected workers with other potential employers.

The job cuts, representing about 14% of its 14,400-strong workforce, come as Direct Line announced aims to more than double its original cost savings target to over £200 million in gross annual savings by 2014, or £130 million a year on a net basis.

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Direct Line has already axed 1,200 jobs since last August under the cost-cutting drive.

The group currently has 16 sites across the UK, including a Churchill office in Princes Street, Ipswich, although it is shutting its Teesside call centre over the next week, as previously announced, and it is understood another site is at risk of closure under the latest move to slash costs.

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Paul Geddes, chief executive of Direct Line Group, said the firm has 'not made these proposed changes lightly'.

He added: '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.'

Direct Line, which was spun out of Royal Bank of Scotland (RBS) when it floated on the stock market last year, recently revealed a £94.3 million profits haul for the first three months of 2013, up 47% on a year earlier thanks to cost savings and unusually low weather-related claims.

But the group, which also owns brands including Green Flag and Privilege, saw gross premiums fall 4.5% during the quarter to about £1 billion as it refused to get drawn into a price war in the fiercely competitive motor insurance market.

Taxpayer-backed RBS floated Direct Line to appease European Union rules on state aid.

RBS still owns 48.5% of the insurer but must sell its entire stake by the end of 2014.

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