Complexity Lessons from the L&G Job Cuts

Why is Legal and General cutting jobs?

Legal and General said on 23 September 2026 that it plans to reduce its workforce as part of a wider effort to simplify the business. Reuters reported that the UK insurer and asset manager plans to cut about 1,000 jobs, representing roughly 10 per cent of its workforce, by the middle of 2027.

Reuters reported that chief executive Antonio Simoes told staff the company had become too complex over the past decade and needed to become leaner. The process is due to begin with a voluntary job-reduction programme, although Simoes did not rule out compulsory redundancies. Unions are expected to be consulted as the details are developed.

The reported rationale matters. No named outlet attributed these proposed cuts to artificial intelligence or automation. The reason given in the reporting is organisational complexity, cost reduction and freeing up cash to invest in areas Legal and General believes can grow faster.

Reuters also reported that the group's asset management arm, described in the coverage as managing about £1.2 trillion, is exempt because it went through its own restructuring last year.

The story clearly attracted public attention. Google's daily trends feed recorded more than 1,000 UK searches for l and g on 23 September 2026, with the announcement driving that interest.

For smaller businesses, the useful question is not whether they should copy a large corporate restructuring. It is how complexity builds quietly enough that an organisation eventually feels compelled to make painful changes.

How does business complexity build up?

Complexity rarely arrives as one obvious problem. It usually accumulates through individually reasonable decisions.

A new approval stage gets added because something once went wrong. A spreadsheet is created because the main system cannot produce one report. A manager begins checking work that used to be handled by a team leader. A new service launches, but the old service remains. A customer exception becomes a standard process because nobody revisits it.

Over time, temporary fixes become permanent ways of working.

Small and mid-sized businesses are particularly vulnerable because processes often grow around people rather than being designed deliberately. A capable employee becomes the person who knows how a task really works. Another person keeps a separate version of important data. A director remains involved in decisions that should have moved down the organisation months earlier.

Growth can make this worse. More customers bring more exceptions. More staff create more handovers. More services create more pricing rules, software tools and responsibilities. None of these changes necessarily looks serious on its own.

The warning sign is when nobody can explain a process simply. If a routine task requires several approvals, duplicated data entry, private knowledge and repeated clarification, the business may be paying a complexity cost every time that task happens.

The lesson from the Legal and General announcement is therefore broader than redundancy. Reuters reported that the company's stated concern was complexity and cost. Smaller firms can examine those pressures before they reach the point where restructuring feels urgent.

What does organisational complexity cost a business?

Complexity creates costs that do not always appear under a convenient heading in the accounts.

The most visible cost is time. Employees spend longer finding information, asking for approval, correcting duplicated work or waiting for another person to complete a handover. Managers become involved in routine decisions because authority is unclear. Owners spend time resolving internal friction rather than developing customers, services or capacity.

There is also a commercial cost. Complicated processes can make quotations slower, onboarding harder and customer requests more difficult to answer. When several people need to interpret the same rule, customers can receive inconsistent answers.

Then there is the cost of maintaining the organisation itself. Every additional process, report, system, meeting and approval needs attention. Even something that takes only a modest amount of effort becomes expensive when it happens repeatedly across the business.

Complexity can also obscure useful management information. If sales, operations and finance all maintain different versions of the same data, a management meeting can become a debate over which number is correct rather than a discussion about what to do next.

The practical aim is not to make every organisation minimal. Some complexity is necessary. A business may have compliance duties, specialist customer requirements or controls that protect money and quality.

The better question is whether each layer still earns its place. If a process exists because it has always existed, rather than because it currently reduces risk or creates value, it deserves review.

How can a small business spot unnecessary complexity?

Start with work rather than organisational charts.

Choose several common activities, such as producing a quotation, onboarding a customer, raising an invoice, handling a complaint or approving a purchase. Follow each activity from beginning to end and write down every handover, approval, system and repeated entry of information.

That simple exercise usually reveals more than asking whether the business feels efficient.

Look especially for decisions that travel upwards unnecessarily. If a manager or owner approves routine work simply because nobody has formally delegated authority, the organisation has created a bottleneck around a person.

Next, look for duplication. The same customer information may sit in email, accounting software, a spreadsheet and a project system. Staff may prepare several reports containing largely the same information because different managers prefer different formats.

Meetings deserve the same scrutiny. A recurring meeting should have a clear purpose, necessary attendees and an outcome. If it exists mainly because it is in everyone's calendar, question whether the work could be handled differently.

Also examine exceptions. Businesses naturally adapt for important customers, but repeated exceptions can turn a straightforward service into a collection of bespoke processes. That raises the effort needed to quote, deliver, invoice and support work.

The goal is to identify where the business spends effort managing its own structure rather than serving customers, meeting obligations or improving the operation.

How do you simplify roles and decision making?

Role clarity is one of the cheapest ways to reduce complexity.

Employees should know what they own, what they can decide and when something genuinely needs escalation. Problems arise when several people are partly responsible for the same outcome but nobody has clear authority.

Start with recurring decisions. Who can approve routine spending? Who decides whether a customer request is within scope? Who owns a complaint? Who changes a delivery date? Who has authority to correct an invoice?

For each decision, aim for one accountable owner and a simple escalation route. Avoid requiring several people to approve something unless each approval controls a distinct and necessary risk.

The same principle applies to management. A growing company can accidentally retain an early-stage habit in which every important decision comes back to the founder. That might work when the organisation is small, but it can become a source of delay as teams expand.

Delegation should be accompanied by boundaries. Giving someone responsibility without explaining what they may decide simply moves uncertainty around the organisation.

It is also useful to examine overlapping roles. Two people may both believe they own supplier relationships, reporting or customer communication. That often creates extra messages, meetings and checking.

Simplification is not about removing control. It is about making control understandable. A clear decision made at the appropriate level is usually easier to review than a decision that passes informally between several people.

How do you simplify business processes and systems?

Once responsibilities are clear, examine the tools and processes supporting them.

Begin with duplication. If information is entered into one system and then manually copied into another, ask why. Sometimes there is a valid reason, but sometimes the second record exists only because an old process was never retired.

The same applies to software. Businesses can accumulate tools quickly as individual teams solve immediate problems. The result can be overlapping subscriptions, fragmented information and staff switching between systems to complete one piece of work.

Before buying another tool, define the process problem first. New software layered onto an unclear process can simply make the complexity digital.

Documents also need attention. Review templates, forms, checklists and reports. Remove fields that nobody uses. Combine documents that serve the same purpose. Retire outdated versions rather than leaving employees to decide which one is current.

Where possible, standardise routine work. A clear standard does not prevent sensible exceptions, but it creates a default way of working that staff can understand and improve.

Process improvement should also remove steps rather than merely accelerate them. Making an unnecessary approval faster still leaves an unnecessary approval.

Finally, document the simplified process in plain language. If the explanation requires pages of exceptions and caveats, there may still be unresolved complexity underneath.

Why cutting headcount is not a business strategy

The obvious wrong lesson from the Legal and General story is that reducing staff numbers is itself a route to becoming simpler.

That is not what the reporting establishes. Reuters reported that Legal and General's stated objective is to address organisational complexity, lower costs and free cash for investment in faster-growing areas. The company is beginning with a voluntary job-reduction programme, and compulsory redundancies have not been ruled out.

For a smaller firm, starting with headcount can make underlying problems worse. If a complicated process remains unchanged but fewer people are available to operate it, the remaining team inherits the same duplicated work, unclear decisions and unnecessary administration with less capacity.

A better sequence is to understand the work first. Remove activities that no longer serve a purpose. Simplify approvals. Clarify ownership. Consolidate duplicated information. Decide which services and customers fit the business model. Then examine what resources the redesigned operation actually requires.

That approach also helps distinguish a genuine capacity problem from a design problem. A team may appear understaffed because employees are spending too much time navigating poor processes.

Cost control matters, particularly when margins are under pressure. But a sustainable cost reduction should follow a decision about how the business intends to operate. Cutting people without redesigning the work can leave an organisation smaller without making it simpler.

How can SMEs reduce complexity before a crisis?

A complexity review does not need to begin as a major restructuring project. A focused week can produce a useful first picture of where time, money and management attention are being lost.

Start by choosing a handful of high-frequency activities and mapping what really happens rather than what the procedure says should happen. Ask the employees who perform the work where they wait, repeat tasks, chase information or seek unnecessary permission.

Then sort the findings into categories: remove, simplify, standardise, delegate or investigate. Some changes can be made immediately. Others may involve contracts, compliance requirements or system changes and need more care.

Owners should also review where senior attention is going. If management spends a large share of its time resolving recurring operational questions, those questions may need clearer rules rather than repeated intervention.

The important part is to treat simplification as an ongoing management discipline. Complexity will return as customers, staff, products and systems change. Regularly removing obsolete steps is easier than waiting until costs force a larger response.

Legal and General's announcement puts organisational complexity into the headlines, but the issue is not confined to large companies. Any growing business can accumulate processes faster than it removes them.

The practical advantage for an SME is that it can often act earlier. Clearer roles, fewer unnecessary steps and better-defined systems can be introduced deliberately, before complexity turns into an emergency cost-cutting exercise.

A one-week complexity audit for a small business

The following checklist is Thind Global Services own framework, not part of the reported Legal and General programme. It is designed to be completed by an owner or manager in a single week.

• Map one customer journey from first enquiry to payment and mark every handover.
• List every approval needed for routine work and challenge any that no longer control a real risk.
• Identify information employees enter more than once and find out why the duplication exists.
• Review recurring meetings and cancel or redesign those without a clear decision or output.
• List software used by each team and flag tools that duplicate another system's purpose.
• Ask staff which routine tasks require them to chase information, permission or another department.
• Write down decisions that still depend on an owner or director and identify which could be delegated.
• Choose three unnecessary steps to remove this week and assign an owner to each change.

Frequently asked questions

What caused the Legal and General job cuts?

Reuters reported that Legal and General said it had become too complex and needed to become leaner. The stated purpose of the reshaping is to lower costs and free cash for investment in areas the company believes can grow faster. No named outlet attributed the cuts to AI or automation, so those should not be presented as causes.

How can a small business tell if it has become too complex?

Look for repeated data entry, unclear ownership, excessive approvals, overlapping software, recurring meetings without clear outcomes and routine decisions that keep returning to senior management. Another useful test is whether employees can explain common processes simply. If basic work depends heavily on individual knowledge, repeated handovers or exceptions, the business may have accumulated avoidable complexity.

Should a business cut staff to reduce complexity?

Not as a starting point. Reducing headcount without changing the work can leave fewer people operating the same inefficient processes. A stronger approach is to map the work, remove unnecessary tasks, clarify responsibilities, simplify approvals and consolidate duplicated systems first. Once the operating model is clearer, management can make better-informed decisions about the resources genuinely required.

How often should an SME review business processes?

There is no single timetable that suits every company. A practical approach is to review processes whenever recurring delays, duplicated work, unclear responsibilities or rising administrative effort become noticeable. It also makes sense to revisit processes after growth, new services, system changes or team restructuring, because complexity often accumulates when businesses add new ways of working without retiring old ones.