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.