In headline business news on the BBC, DLG (Direct Line Group) announced a major redundancy programme as it makes an attempt to improve its operational efficiency as part of an ongoing implementation of its business transformation plan.

In a statement DLG said the group anticipated that “approximately 2000 roles may become redundant” – mainly head office and support function roles are believed to be most at risk and the company has already begun consultation with staff and their representatives.

DLG is now targeting its 2014 cost base to be approximately £1bn – claims handling and operating expenses – reflecting a net reduction in annual costs of approximately £130m when compared with the 2011 cost base. This would represent gross annual cost savings of more than twice the original £100m target announced in August 2012. DLG said it will maintain employee consultation throughout the process, and hopes to mitigate the impact of staff redundancy through redeployment and identifying opportunities with other potential employers.

This follows news in August that DLG announced a cost savings plan targeting gross annual cost savings of £100m in 2014, when compared with the 2011 cost base of £1.13m. At the time, the firm confirmed plans to make 891 redundancies. In October DLG confirmed approximately 100 jobs would go across its IT departments and a week later it confirmed that a further 70 senior management roles are being axed as part of the second phase of its savings strategy.

This morning it stated: “The restructuring costs announced today aim to deliver all cost reduction initiatives, including provisions for onerous property leases, are now estimated to be £180m. Of this £30m was recognised in 2012 with the remaining £150m expected to be recognised in 2013, or in 2014, with the phasing to be finalised. The expected costs of migrating the group’s IT infrastructure, is unchanged at £100m.” as reported by Post today (26th June)

DLG chief executive officer, Paul Geddes, said: “This is another step in the ongoing transformation of DLG 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. 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 has not been immune to the market pressures, choosing to maintain its stance of not using “middlemen” of which comparison sites are included where business insurance and personal insurance customers are obtaining some lower premiums and getting an impartial service at the same time. Cheap plumbers liability insurance and cheap landlords insurance are just two lines of business which are key to maintaining market share and delivering the required results