There's a big jobs blow for the region with fears that 470 local people could be axed from the insurance giant Direct Line. The company which has bases in Leeds and Doncaster says it's ramping up its cost-cutting plans - but unions say the cuts are savage. Kate Walby reports.
Leeds Central MP Hilary Benn says that the loss of Direct Line jobs in the city will harm the wider economy.
Plans for around 2,000 job losses at Direct Line to reduce costs have been branded as “a savage bolt from the blue” by the country’s largest union, Unite.
Unite said that it had several hundred members working for the company but no union recognition.
– Unite national officer for finance Dominic Hook
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.
Unite will continue to strongly oppose anti-union bias where it exists in the finance sector and will give all the support we can to our members at Direct Line on an individual basis.
– Paul Geddes, Chief Executive Officer of Direct Line Group
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.”
Direct Line recently revealed £94.3 million profits for the first three months of 2013.
This was an increase of 47% on the previous year due to cost savings and unusually low weather-related claims.
However, the group, which also owns Green Flag and Privilege, also saw gross premiums fall 4.5% during the quarter to about £1 billion.
Last year, Direct Line was spun off from Royal Bank of Scotland when it floated on the stock market to satisfy European Union conditions on state bailouts.
RBS still owns 48.5% of the insurer but must sell its entire stake by the end of 2014.
About 2,000 jobs are under threat at Direct Line Insurance, which has its headquarters in Leeds, after the group announced plans to more than double its cost-saving plans.