Direct Line has confirmed that its legal team will be impacted by a group-wide redundancy round that puts 2,000 jobs at risk.
The group, part of the Royal Bank of Scotland (RBS), announced the review yesterday (26 June) as part of a new cost cutting plan to save almost double the £100m it had targeted to save back in August.
The majority of the potential job losses are set to come from Direct Line’s head office and support functions. The legal team, as a head office function, is one of the divisions at risk athough it is not yet clear how many roles within the division might be cut. Around 40 staff are understood to work in the division, which is led by general counsel Humphrey Tomlinson.
Consultations over the job losses have begun and are set to last between 45 and 90 days.
The group’s CEO Paul Geddes said in a statement: “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.”
Direct Line was floated by RBS in September in what was one of the biggest IPOs of the year. Allen & Overy (A&O), Linklaters and Slaughter and May advised, with A&O’s team led by London corporate partner David Broadley advising both RBS and Direct Line (14 September 2012).
RBS’s decision to instruct A&O was a noteworthy move by the bank, which has a longstanding relationship with Linklaters. Linklaters has advised it on a string of major M&A and equity capital markets (ECM) deals, including its 2007 takeover of ABN Amro (16 April 2007) and its £12bn rights issue in 2008 (23 April 2008). However, almost as established are Linklaters’ ties with Goldman Sachs, which led the Direct Line IPO alongside Morgan Stanley.