Norwich Union hit by Aviva 900 jobs cull

By Rachel Stevenson
Tuesday 08 October 2013 05:58

Aviva, the UK's largest insurer, yesterday became the latest company in the financial services industry to slash its workforce, making 900 job cuts to reduce costs.

The bulk of the job losses come in the general insurance division of Norwich Union, Aviva's UK business, although some are from its life and pensions units. About 600 of the cuts are expected to be compulsory redundancies and one office will be closed down entirely. Almost all of the 280 workers in Cheadle, Staffordshire, will face compulsory redundancy as the office is being shut down and the business it processes transferred to another site. The company's sites in Norwich, Perth and Worthing are also being affected.

"We operate in an extremely competitive market and have to continually look at ways to achieve greater efficiency and effectiveness," Patrick Snowball, an executive director at Aviva, said. "We believe the changes are necessary to adapt to changing market conditions and make our business fit for the future."

Aviva employs 33,000 people in the UK, some 3,000 of which are in call centres. Mr Snowball has been reviewing the whole UK operation and said many of the cuts were to remove duplication in the group. He was unable to rule out further job cuts, but promised the move would mean an improvement in its customer service. Staff in its general insurance arm will know their fate by the end of August.

The move infuriated unions, who are still fighting the company's plans to outsource 1,000 jobs to India. Roger Lyons, general secretary of Amicus, said: "This is a sad day for workers at Norwich Union and particularly those at the Cheadle site. The fact that so many compulsory redundancies are part of the job cuts is particularly hard for Norwich Union staff."

He said Amicus would now be meeting the company to try to reduce compulsory cuts and to open up as many voluntary routes as possible.

But Aviva said yesterday the cuts were not as a result of its decision to open a call centre operation in Asia. "We will be watching with interest any developments on outsourcing and offshoring within Norwich Union and within their parent company Aviva," Mr Lyons said.

Aviva reports its six-month results in two weeks and analysts are expecting a slump in sales across the whole insurance industry as consumers shy away from investing. The group, like many of its rivals, lost billions last year on investments in the stock market, and is now desperate to conserve capital.

Aviva's decision follows other similar moves in the financial services industry. Investment banking has been one of the hardest hit, and thousands of workers have been laid off at firms such as Merrill Lynch and Goldman Sachs.

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