The Dutch insurer Aegon warned of job losses among its 3,700 life and pensions employees in the UK yesterday as part of a major overhaul of its operations.
The company aims to cut its costs in Britain by 25 per cent by the end of next year under a plan to refocus the business and pull out of unprofitable areas. Aegon said it was too early to say how this would affect staff, but it plans to give more details at the end of September.
Aegon's UK life and pensions arm will take the brunt of the cost-cutting. This division employs about 2,400 staff in Edinburgh, 670 at Lytham St Annes, Lancashire, and 630 in sales roles across the country.
Alexander Wynaendts, the chairman, said plans to trim annual UK costs by £80m would have a "significant" impact on its British workforce. "We are not at this point sharing much more detail, but it is clear it will have a significant impact on our UK business and also an impact on our employment," he added.
He confirmed that the company had looked at a possible sale of the UK business, but decided it would not offer the best value for investors in the current climate. Recent speculation has suggested the group is seeking to ready its British business for sale, but he said the restructuring would see it make a "long-term commitment to the UK".
Aegon plans to withdraw its UK business from bulk annuities – bought by firms that run final salary pension schemes to provide an income for their workers who retire. It will instead focus solely on the "at retirement" market and workplace savings, including the popular DIY-style self-invested personal pensions (SIPPs).
The company stressed that its cost-cutting review would not have an impact on Aegon Ireland, while the UK asset management business and distribution arms, Origen and Positive Solutions, were also not under the scope of the review.
Aegon's UK restructuring comes as part of wider changes announced yesterdayto shore up the business, which has struggled since the credit crisis. It was forced to take state aid from the Dutch government at the height of the crunch and still owes €2bn (£1.7bn). Aegon's UK business was founded in 1994 when the Dutch company bought Scottish Equitable.