Fury over 4,000 job cuts at Norwich Union

The UK's largest insurer, Norwich Union, announced yesterday it was axing another 4,000 UK jobs, taking the total number of cuts over the past three years to more than 10,000.

Up to 1,000 of the jobs will be relocated to India, where the company already employs about 5,500 people. A further 500 are going after the decision to outsource IT roles to a third party. However, the group said the rest had been lost at the hands of enhanced technology and changing distribution patterns.

The cuts are to generate savings of some £250m a year by the end of 2008, and will cost the business a one-off charge of about £250m to implement.

Patrick Snowball, Norwich Union's executive chairman, said the cuts were being made across the business - from its back office and customer services to its IT department. However, he stressed the group had been careful not to cut back on customer services in its life division.

"The area we are protecting very carefully is life services," he said. "We had some problems there last year, and we've now got the levels of service back up to where we want, and we don't want to jeopardise that."

Mr Snowball conceded that up to 50 per cent of the job cuts would be compulsory redundancies but said the group was keen to secure as many of the cuts as possible through voluntary redundancies and natural turnover. He said employees would be offered other jobs within the business where possible.

The unions, which were briefed on the cuts only on Wednesday night and yesterday morning, reacted angrily to the news. David Fleming, Amicus's national officer said: "This is absolutely brutal, and compulsory job cuts and offshoring will not be accepted by us or our members.

"This is a betrayal of Norwich Union's long-serving workforce who have woken up to news in the media this morning that their jobs are going, rather than hear it from their employer. The fact that they are offshoring half of the work and subcontracting some of that will have service implications for customers as well as staff. They are treating their staff with contempt and clearly have more regard for their shareholder profits than their UK workforce."

Mr Snowball said while cutting jobs was always difficult, it was crucial to ensure the ongoing stability and growth of the business. "It's important to remember that 5 per cent of our staff have been affected, but these cuts will reinforce the strength of the rest of the company to employ the other 95 per cent," he said.

Norwich Union is owned by Aviva, whose shares rose 1.5p to 770.5p on the back of yesterday's news, valuing the company at £18.6bn.