GRE slashes 300 more jobs as offices shut

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The Independent Online
GUARDIAN ROYAL EXCHANGE is getting rid of four times as many jobs as expected following the merger of its healthcare division with PPP, the health insurer it bought in February.

GRE, which paid a total of pounds 560m for PPP, said 300 jobs must go as it closes two offices in Eastbourne and Folkestone. The Guardian brand will disappear from healthcare so all products can be sold under the PPP name.

The 300 job losses - which GRE said would be compulsory redundancies - are in addition to 100 jobs that GRE said would disappear through "natural wastage" as the merger went ahead. The group aims make savings of pounds 25m a year from the merger, starting in 1999. At the time of the merger announcement only pounds 15m of savings were anticipated.

Closing the offices in Eastbourne and Folkestone will cost the group pounds 30m, which will be spread between 1998 and 1999.

GRE said it would offer full redundancy packages to staff who could not be found a place at Tunbridge Wells, which will become the headquarters of PPP. Exactly where the job losses will fall is yet to be decided.

Derek Rome, director of corporate affairs at GRE, said: "We have realised that we need to consolidate our brands into one. We are continually aware of the need to contain costs and improve customer service. This led us to the conclusion that it made sense to consolidate our operations into one site at PPP healthcare."

Guardian clinched the deal last December after beating off two other interested parties, Halifax and GE Capital. It then launched a review as to where cost savings would be found, which concluded last month.

The GRE group has been hard hit by heavy insurance claims stemming from severe weather. Profits at the half-year stage were 9 per cent down and the group said premiums on some policies would be increased.

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