Legal & General to Cut 1,000 Jobs in Restructuring Under CEO Simoes

Insurance giant Legal and General (L&G) is set to eliminate 1,000 jobs, representing a tenth of its workforce, as part of a significant restructuring effort led by chief executive Antonio Simoes. The company has initiated a voluntary redundancy program with the goal of reducing its headcount by the middle of 2027.

This move comes amid broader economic challenges in the UK, where private sector employers have been cutting jobs for the past two years, according to recent purchasing managers' index (PMI) data. The PMI survey indicates a challenging job market under the current government, with its tax and employment policies reportedly discouraging hiring.

Simoes, who took over as CEO in 2024, launched the shake-up to simplify the business and move away from the legacy of his predecessor, Nigel Wilson. In an internal email, Simoes stated that over the past decade, L&G had developed more complex structures, processes, and working methods than necessary. He emphasized the need for changes to better reflect the evolving business and to create a leaner organization.

Prior to the job cuts announcement, Simoes had already reorganized the group from four divisions into three and divested assets such as the housebuilder Cala Homes. He also assembled a new executive team and committed to returning over £5 billion to shareholders between 2025 and 2027.

Most of L&G's approximately 10,000 employees are based in the UK. While the redundancy program is initially voluntary, the company may consider mandatory job cuts depending on the uptake. The planned reductions do not include the group's asset management division, which is already undergoing its own restructuring and shedding about 70 jobs.

A spokesperson for L&G described the changes as the "next stage" in the transformation of the business into a simpler, more focused entity since 2024. The company does not anticipate that the cuts will affect its graduate hiring program. It is understood that the increasing use of artificial intelligence (AI) in the workplace was not a primary factor in the decision.

L&G shares, which have risen 12% this year, saw a slight decline following the announcement. The job cut news coincided with the release of September PMI data, which showed continued job losses in the UK, a slowdown in economic growth, and intensifying inflationary pressures. The PMI reading for September was 51.7, the lowest in three months, suggesting quarterly economic growth of only 0.1%.

Chris Williamson, chief business economist at S&P Global Market Intelligence, attributed the hiring hesitancy to "subdued business confidence and high costs." He also cited increased borrowing costs and uncertainty surrounding government policy in the lead-up to the Budget as factors contributing to the economic climate.