Legal & General is to cut about 1,000 jobs by the middle of next year, around 10 per cent of its workforce, as the FTSE 100 life insurer continues efforts to simplify its operations.
António Simões, the chief executive, told staff in an email that the group remained “more complex” than it needed to be and required further simplification to “deliver our strategy successfully”. The email was first reported by Bloomberg.
In the UK, the next phase of simplification will begin with voluntary redundancies. The asset management unit will be spared any role reductions, having already merged the separate operations within that part of the business.
Shares in L&G, which have risen 24 per cent over the past year, dipped 1½p, or 0.5 per cent, to 295p.
During almost three years in charge, Simões has slimmed down L&G to focus on three divisions: institutional, retail and asset management. The restructuring reduced the group from four divisions to three.
The effort has seen the group exit non-core assets, including Cala Homes, the housebuilder it sold to a group of private equity firms for £1.35bn. According to L&G’s announcement of the Cala sale, the buyer was Ferguson Bidco, an entity owned by funds managed by Sixth Street Partners and Patron Capital, and the deal was expected to generate cash proceeds of £1.16bn after adjusting for net debt.
In his email to employees, Simões said: “Over the past two and a half years, we have made significant progress executing our strategy, simplifying L&G, establishing three core businesses, and creating a more focused business.”
He added: “However, over the last decade, different structures, processes and ways of working have developed across L&G, making us more complex than we need to be. To deliver our strategy successfully, we now need to make sure the way we work reflects the business we are becoming. Across L&G, we need to change how we work today and, through this, become a leaner organisation.”
The job cuts follow half-year results in August that exceeded City forecasts. L&G reported a rise in core operating profit across all three of its units, with total core operating profit up 7 per cent to £918m.
The company’s half-year results statement also showed core operating earnings per share up 11 per cent over the period.
L&G said it had bought back shares worth £450m by the end of July, having announced a £1.2bn buyback programme earlier this year.
The announcement follows headcount reductions at other financial and professional services firms this year. Last week, KPMG said it would cut about 200 UK advisory roles, citing low staff turnover and weaker corporate spending on consultancy.
In March, Octopus Investments said it would cut 20 per cent of its staff, about 130 roles, mainly in back-office functions, as it expanded its use of artificial intelligence to automate routine tasks.
The same month, Business Matters reported that HSBC could cut up to 20,000 jobs as it explored automation of back and middle-office roles across its global workforce of about 210,000 people.
