1,500 UK jobs to go at AMP in bid to save £100m

AMP, Australia's biggest fund manager, will lay off 1,500 employees – 20 per cent of its workforce in Britain – in an attempt to slash costs by £100m by the end of next year.

The company, which owns a number of financial services businesses in the UK including Henderson Global Investors, Pearl Assurance and NPI, will start the downsizing with a cull of 800 staff this year.

The cuts, which will cost AMP £30m, will be among staff who are duplicating roles afterthe merger of different parts of AMP's businesses in the past few months. Most of the job losses will therefore be among staff at Pearl and NPI, the life insurance businesses which have been brought under the same umbrella, and at Towry Law and iii, AMP's financial adviser arms.

AMP told staff yesterday that the cuts would have to be made and it will start talks with the trade union Amicus next week about where the redundancies will fall. They will be concentrated in London, Bristol, Peterborough, Tunbridge Wells, Bracknell, and Cardiff.

Amicus condemned the level of cuts. David Fleming, the national secretary for the financial sector of Amicus, said: "I am not overjoyed that there was hardly any consultation prior to the announcement about the losses. Our job now is to try to make sure there are no compulsory redundancies and to minimise losses."

Tom Fraser, the head of AMP's UK arm, said that "wherever possible" staff would be redeployed and redundancies would be kept to a minimum by not replacing staff who leave.

AMP is the latest financial services provider to cut costs at a time when negative stock market returns have taken chunks out of companies' balance sheets. Rivals such as Prudential and Britannic have focused particularly on slashing massive salesforces. AMP has cut some of its salesforce, but most of its job losses will be among back office workers such as IT, sales support and consumer services. The Australian company is preserving most of its salesforce because it believes many customers still want to deal in person with an adviser.

AMP aims to boost profitability in the UK and raise the return on capital to about 15 per cent from 10.2 per cent. It said it is a third of the way into a three-year plan to cut costs. It has also rebranded most of its UK businesses to raise awareness about the group's overall name, so that the AMP name is attached to them, so that Pearl has now become AMP Pearl.

Mr Fraser said: "Our operations have been re-engineered to make it easier for customers to deal with us and we have put in place an integrated infrastructure. We are now running one business, with three brands under one umbrella, rather than three businesses."