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A hundred Brit IT bods' jobs under threat at Direct Line

Outsourcing on the agenda, says Reg source

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Exclusive Insurance group Direct Line is considering cutting up to 100 IT jobs in its plan to save £100m a year, some of which may go to outsourced employees.

The Direct Line Group confirmed to The Register that 100 jobs are in the middle of a 90-day consultation period that started on 5 September and that outsourcing in general was an option being considered in the group's efforts to save money.

The group owns a number of insurance brands, including Direct Line, Churchill, and Green Flag.

A Reg source familiar with the matter said that the jobs would be lost in December and that permanent IT staff would be replaced by offshore workers in India. The jobs are to go from Direct Line offices in Croydon, Bromley, London and Leeds. It was also claimed that more IT jobs could be lost in the next two years as Direct Line expanded its IT outsourcing.

Direct Line Group separated from parent the Royal Bank of Scotland over the summer and floated in an IPO this month. Selling off the insurance group was a condition set by European regulators for the UK government bailout of the bank.

The group announced in August that it was targeting savings of £100m by the end of 2014 and has already implemented some job losses in the effort to become more efficient. A Teeside call centre for the group was told last month it will shut early next year, leaving 500 people out of work. Direct Line admitted that it would cut another 391 employees in the UK as part of its restructuring.

"We have not made these proposals lightly and fully understand the impact this will have on our people," chief exec Paul Geddes said at the time. "As we have done in the past, we will be open and honest, dealing fairly and carefully with those affected." ®

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