DIRECT Line yesterday announced plans to cut 70 senior management positions as it looks to make substantial cost savings.
The insurer said that as a result of the changes Jonathan Davidson, chief operating officer, and managing director Sheree Howard, have “decided to leave the organisation”.
The news follows last month’s announcement that it would sack 900 workers, including the closure of an entire call centre in Stock-on-Tees, near Middlesbrough.
Chief executive Paul Geddes said: “We are creating a simpler, more efficient business which costs less to run. As market leader, these changes are essential for us to succeed in a competitive marketplace. I don’t make these changes lightly, and we will do all we can to support those affected.”
As a result of the changes Angela Morrison, chief information officer, will join the executive board. Howard’s responsibilities for ensuring Direct Line complies with the new Solvency II insurance regulations have been handed to Jose Vazquez, chief risk officer.
The cost-cutting measures are part of the company’s stated aim of returning a 15 per cent return on equity, partly by cutting out £100m of costs by 2014.
The firm, which was previously part of RBS, enjoyed a successful London flotation earlier this month and the stock has performed well since the IPO, rising to 190p and valuing the company at £2.85bn.
However 65.3 per cent of the company is still owned by RBS, which has to offload its shares by the end of 2014, meaning the firm must remain attractive to new investors.