The UK's second-biggest insurer, Prudential, is to cut 2,000 jobs in a restructuring of its direct sales team in the UK.

The job losses in the sales and administration units will leave the insurer with 9,500 staff in Britain, down from the current 11,500.

The company said it would be replacing its direct sales force of 1,400 consultants - "the man from the Pru" to many UK households - by a smaller specialised force of qualified advisors.

The new team will provide a "face-to-face financial planning service", and is expected to grow to around 250 advisors.

The company also said that it would be expanding its internet and direct telephone sales operations.

The cost of the restructuring is expected to amount to �110m, however from 2002, the company predicts that it will save about �135m annually, before tax.

A competitive market

The market for insurance has become increasingly competitive with an explosion in direct sales through the internet and over the phone.

"The drive for lower pricing in the UK means that it is no longer economic for us to maintain a large salaried face-to-face workforce," said John Elbourne, the chief executive of Prudential UK operations.

He has emphasised that consumers will benefit from the new changes through lower costs and simpler ways to purchase insurance.

But banking unions described the announcement as "devastating" and said that representatives were holding urgent meetings with the company to try to minimise the effect of the job cuts.

Shares in the company stood 6p higher at 1,007p in early trading Tuesday.