500 jobs could go at Teesside call centre

500 jobs at risk at Direct Line propose to close site in Stockton-on-Tees Credit: Direct Line Group/PA Wire

RBS insurance arm Direct Line Group has announced proposals to axe nearly 900 roles and close a site in the North East.

The group, which owns the Churchill and Green Flag brands and employs some 15,000 staff in the UK, is planning the redundancies as part of plans to make £100 million of cost-savings by the end of 2014.

500 of the 891 roles could go under plans to close a customer services site in Stockton-on-Tees. The other job losses are expected to be spread across the group's locations across the UK.

Chief executive Paul Geddes said: "We have not made these proposals lightly and fully understand the impact this will have on our people.

"As we have done in the past, we will be open and honest, dealing fairly and carefully with those affected."

Stockton South MP James Wharton has called the announcement of 500 job losses on Teesside 'a shock'.

"This is very sad news for all those who work at the Direct Line call centre.

"Directors also assured me they would look to redeploy people within the company where they can but it is clear there are going to be job losses.

"We have had so much good jobs news on Teesside, with SSI reopening Corus, Hitachi bringing a new train factory and companies like Nifco expanding, it is such a shame when something like this comes along. This is the third time in recent years that the call centre business in our area has taken a hit after Garlands, then Barclay Card and now Direct Line."

With taxpayer-backed RBS forced to offload Direct Line Group as a condition of its £45 billion bail-out, it is widely expected the business will be floated on the stock market later this year.

Direct Line Group, which is already acting as a standalone company, revealed in results on Monday that it planned to make the efficiency savings by the end of 2014 and it admitted that job cuts were likely.

Staff were told that Direct Line would try to help them find work elsewhere within the group or with other employers.