Pru cuts 4,000 jobs to save pounds 200m a year
Friday 18 June 1999
The job losses were nearly 10 times the level of redundancies the City had been led to expect. They will fall entirely in the UK and will mean compulsory redundancies for a substantial proportion of the Pru's back office staff.
The life insurer said the jobs would be cut over the next three years, costing pounds 150m to execute and leading to savings of pounds 200m a year by 2002. The sales force, which has halved since 1997 from 6,000 to 3,000, will be unaffected.
Jonathan Bloomer, deputy chief executive, said the Pru found the cuts were necessary after examining what it had to do to meet demands from government and regulators for cheaper pensions and savings.
"We started from the assumption that we could charge just 1 per cent on our products and built a business model from that," he said. "Our goal is absolutely to ensure there is no reduction in service and no slippage in compliance."
The Government is demanding life insurers charge 1 per cent a year or less if they want to offer customers stakeholder pensions, the low-cost pension model which forms a main plank of its welfare reforms.
Until recently, life insurers typically charged more than 6 per cent of total contributions to a pension over its lifetime, with most of that extracted from the first few years' contributions.
Of the 4,000 facing redundancy, 900 are staff who collect premiums in monthly visits to customers' homes. The Pru is outsourcing this business to FMCH, a division of the Canadian-owned direct mail company Mosaic, in a five-year deal worth pounds 65m.
A further 1,000 temporary and casual staff will be cut and an insurance centre in Chester will close with the loss of 170 jobs. Prudential did not say where the remaining 2,000 cuts would fall.
- 1 Saudi Arabia mosque bombing: Two volunteer security guards hailed as heroes for stopping Isis suicide bomber reaching worshippers
- 2 Maisie Williams has an excellent message for one confused fan
- 3 There is something wrong but very right about this Bible illustration
- 4 Puerto Rico, island of lost dreams: People are leaving the debt-hit territory in droves as near neighbour Cuba's star rises
- 5 Tampon tax scrapped in Canada after petition convinces conservative government
Saudi Arabia mosque bombing: Two volunteer security guards hailed as heroes for stopping Isis suicide bomber reaching worshippers
Maisie Williams has an excellent message for one confused fan
Archaeologists discover 2,400-year-old gold bongs in Russia
Tampon tax scrapped in Canada after petition convinces conservative government
Migrants in Kos: Photos show real tragedy after British tourists complain of 'awkward' holidays
EU referendum: David Cameron's rules are a 'democratic disgrace', says French-born Scottish politician set to be denied a vote
British tourists complain that impoverished boat migrants are making holidays 'awkward' in Kos
A nation of inequality: How the UK is failing to feed its most vulnerable people
Australian man punched in the face for defending Muslim women from abuse on train
David Starkey 'tells Amal Clooney to shut up and stop over-promoting human rights'
EU referendum: David Cameron to deny EU migrants and under-18s the chance to vote
iJobs Money & Business
£30 - 35k: Guru Careers: We are seeking a Pricing Analyst to join a leading e-...
£20000 - £25000 per annum + OTE £45K YR1: SThree: At SThree, we like to be dif...
£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is a mul...
£55 - 65k (DOE): Guru Careers: A unique opportunity for a permanent C# Develop...