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Legal & General plans to reduce its workforce by around 1,000 roles, or about 10% of its staff, by mid-2027, as the insurer and pensions group simplifies its operations. Chief executive António Simões told employees about the plan on Wednesday.
The group will initially offer voluntary redundancies in the UK and will consider mandatory cuts if fewer employees take up the scheme. L&G said the changes would allow it to focus investment on areas where it sees the strongest prospects for growth. Unions will be consulted as part of the process.
In his message to employees, Simões said structures, processes and ways of working developed across L&G over the past decade had left the group ‘more complex than we need to be’.
The asset management division, which oversees around GBP 1.2 trillion globally, will not be included in the program. The division underwent its own restructuring last year, so the latest cuts are expected to fall mainly on group functions and the life insurance and pensions businesses.
Simões, who previously worked at HSBC and Santander, became L&G’s group chief executive on January 1, 2024. He told staff that the company had spent the past two and a half years simplifying the group and building it around three core businesses.
A major step was the sale of L&G’s US protection business to Japan’s Meiji Yasuda for USD 2.3 billion. Under the deal, Meiji Yasuda also took a 20% economic stake in L&G’s US pension risk transfer unit and a 5% stake in the group. L&G also dropped plans for a China license and began selling housebuilder Cala.
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The workforce reduction follows L&G’s stronger half-year results in August. Core operating profit rose 7% to GBP 918 million, while core operating earnings per share increased 11%. Its Solvency II coverage ratio stood at 201%, above its 160%-190% operating target.
A GBP 1.2 billion share buyback is under way, while L&G expects to return more than GBP 5 billion to shareholders between 2025 and 2027. The company has not yet disclosed the expected savings, restructuring costs, or timing of the financial benefits from the job cuts.
