Anger erupts as AXA cuts 2,000 insurance jobs

AXA, the insurance giant, provoked a storm of protest yesterday after it announced that it is to cut 2,000 jobs following its pounds 3.45bn takeover of Guardian Royal Exchange.

The scale of the cuts, which include 1,500 compulsory redundancies over two years, is significantly higher than was suggested in February when AXA won the auction for GRE. Its success at the time was due in part to the fact that, unlike rival bidder Royal & SunAlliance, which was talking of 5,000 job cuts, AXA had talked only of modest staff reductions.

Mark Wood, chief executive of AXA's UK offshoot Sun Life & Provincial, said in February when the deal was announced that these would be "in the hundreds, not the thousands".

Bernadette Fisher, negotiator for the banking and finance union Bifu, attacked yesterday's job cuts. "When the AXA bid was announced in February it appeared to be the best option for staff of the ailing insurer. AXA do look set to bring much needed investment to help turn the company around. However, staff on the general side of the company are set to pay a very high price to secure the future of the business." She added: "Nearly one in three jobs is set to disappear on the general side."

AXA, which sponsors football's FA Cup, said that 100 days after the initial takeover announcement, its integration teams had found scope for an extra pounds 15m of savings on top of the pounds 50m talked of in February, although the cost of achieving those savings has also gone up from pounds 80m to pounds 91m, which will be taken as a one-off charge.

Following the takeover, which went unconditional yesterday, AXA plans to cut the number of commercial business branches from 32 to 18, the number of sites for processing claims from 17 to six, and the number of offices where calls from the public are answered from 24 to four, all of which will be integrated into a permanently-open "virtual call centre".

As a result, over the next two years the group will close down operations at 11 sites around the country, including Exeter, Folkestone, Hitchin, Liverpool, Nottingham and Wolverhampton. The cuts have fallen equally heavily on AXA and GRE's general insurance business.

Particularly badly hit will be the Cumbrian town of Kendal, where AXA employs 400 at the former Provincial insurance headquarters, which will also close. Provincial is one of the largest single employers in the region.

The group also plans to move to one single integrated computer system. The GRE name will be progressively phased out starting in July when all new policies sold over the phone will be branded as AXA, with existing Guardian policies switching to AXA as they are renewed.

Guardian's healthcare brand, PPP, will remain. Peter Owen has agreed to stay on as chief executive of PPP and to implement an efficiency programme, while John Robins, the chief executive of GRE, will stay on for a year on a reduced salary advising Claude Bebear, the AXA chairman, on opportunities in South-east Asia.

No final decisions have yet been made on the future of GRE's Irish business or its UK life and asset management operations. Both are under review.

Yesterday Mr Wood said that, while he was sad for those affected by the cuts, he believed it was better to announce the redundancies now as a block to reduce uncertainty. "The decisions we are announcing today set the course for the business and remove many of the long-term uncertainties, particularly for staff, which are often associated with mergers and acquisitions."

Start your day with The Independent, sign up for daily news emails
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Adviser - OTE £24,500

£22500 - £24500 per annum: Recruitment Genius: Inbound and outbound calls with...

Recruitment Genius: Business Development Executive / Sales - OTE £40,000

£18000 - £40000 per annum: Recruitment Genius: This fast growing Insurance Bro...

Guru Careers: Research Associate / Asset Management Research Analyst

£40 - 45k (DOE) + Benefits: Guru Careers: A Research Associate / Research Anal...

Ashdown Group: Chief Technology Officer (CTO) - Glasgow

£90000 - £98000 per annum + benefits : Ashdown Group: A truly exciting opportu...

Day In a Page

Solved after 200 years: the mysterious deaths of 3,000 soldiers from Napoleon's army

Solved after 200 years

The mysterious deaths of 3,000 soldiers from Napoleon's army
Every regional power has betrayed the Kurds so Turkish bombing is no surprise

Robert Fisk on the Turkey conflict

Every regional power has betrayed the Kurds so Turkish bombing is no surprise
Investigation into wreck of unidentified submarine found off the coast of Sweden

Sunken sub

Investigation underway into wreck of an unidentified submarine found off the coast of Sweden
Instagram and Facebook have 'totally changed' the way people buy clothes

Age of the selfie

Instagram and Facebook have 'totally changed' the way people buy clothes
Not so square: How BBC's Bloomsbury saga is sexing up the period drama

Not so square

How Virginia Woolf saga is sexing up the BBC period drama
Rio Olympics 2016: The seven teenagers still carrying a torch for our Games hopes

Still carrying the torch

The seven teenagers given our Olympic hopes
The West likes to think that 'civilisation' will defeat Isis, but history suggests otherwise

The West likes to think that 'civilisation' will defeat Isis...

...but history suggests otherwise
The bald truth: How one author's thinning hair made him a Wayne Rooney sympathiser

The bald truth

How thinning hair made me a Wayne Rooney sympathiser
Froome wins second Tour de France after triumphant ride into Paris with Team Sky

Tour de France 2015

Froome rides into Paris to win historic second Tour
Fifteen years ago, Concorde crashed, and a dream died. Today, the desire to travel faster than the speed of sound is growing once again

A new beginning for supersonic flight?

Concorde's successors are in the works 15 years on from the Paris crash
I would never quit Labour, says Liz Kendall

I would never quit party, says Liz Kendall

Latest on the Labour leadership contest
Froome seals second Tour de France victory

Never mind Pinot, it’s bubbly for Froome

Second Tour de France victory all but sealed
Oh really? How the 'lowest form of wit' makes people brighter and more creative

The uses of sarcasm

'Lowest form of wit' actually makes people brighter and more creative
A magazine editor with no vanity, and lots of flair

No vanity, but lots of flair

A tribute to the magazine editor Ingrid Sischy
Foraging: How the British rediscovered their taste for chasing after wild food

In praise of foraging

How the British rediscovered their taste for wild food