Co-operative Legal Services (CLS) has told staff it will make up to 60 redundancies in its personal injury department.

In a staff briefing held in a Bristol hotel today as part of an annual business meeting, managers informed the 120-strong department of plans to halve the workforce, with a consultation set to start in January. The Gazette understands there will be no options for voluntary redundancy and talks will now be held with NACO, the Co-operative’s trade union.

Staff were told the cuts are due to the firm losing a large source of personal injury work last year, with not enough new claims coming in.

A spokesman for CLS told the Gazette: ‘We have announced a restructuring of our personal injury division and formal consultation with staff will begin in the new year.

‘We are keen to consult with colleagues in the first instance and are unable to provide further details at this stage.’

CLS was at the vanguard of the wave of new entrants to the legal sector after the Legal Services Act and was one of the first three alternative business structures to be licensed by the SRA.

But the firm posted a £3.4m loss in the first half of 2013, compared with a £700,000 profit for the same period in 2012. Turnover in the legal arm grew 5.8% to £18.1m.

This week it was confirmed CLS will not be part of the ‘root and branch’ review of the group triggered by allegations made against the former chairman of Co-op Bank, Paul Flowers.

In addition to the redundancies, staff were today told one of the founders of CLS, commercial director Robert Labadie, will leave at the end of this month after seven years with the business.

Matt Howells will take up the role of managing director in 2014, reporting to Alistair Asher, group general counsel for the Co-operative Group, joining the business from Barclays where he was director of UK secure lending.

Interim managing director and chief operating officer Steven Round will continue with CLS to ensure an efficient handover.

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