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Last Updated: Tuesday, 2 December, 2003, 17:06 GMT
Norwich Union jobs move to India
Norwich Union offices
New offices will open in Bangalore
UK insurance giant Norwich Union has told staff that it will cut 2,350 jobs in the UK and export the work to India.

Parent firm Aviva said operating costs in India were typically 30-40% lower than in the UK and that the move would also help it provide 24-hour services.

The Amicus trade union criticised the decision to move the jobs to India as "despicable" and vowed to fight it.

Amicus officials said there could be 500 compulsory redundancies, a figure that Aviva disputes.

Aviva already has offices in Delhi and Bangalore, where about 1,200 staff process general insurance claims.

It defended its latest move as being about adding flexibility as well as cutting costs.

The time difference between the UK and India would allow the company to move to round-the-clock claims processing and administration, Aviva said.

Job market fears

Unions have warned that up to 200,000 jobs in the finance sector could leave the UK over the next five years as companies take advantage of cheaper labour costs abroad.

Indian IT workers at a software company in Bangalore, India

Average call centre salaries in the UK are about 12,500 a year, compared with 1,200 in India.

Aviva says it hopes the bulk of its job cuts will come through natural staff turnover or voluntary redundancies. The union warns that there will be hundreds of compulsory job losses.

However, according to Aviva only 12 workers faced compulsory redundancies when the firm moved 1,250 jobs to India earlier this year.

Call centre or data input jobs tend to have a very high turnover of staff.

"This deplorable announcement by Aviva is based purely on greed - it ignores Aviva's corporate social responsibility towards both its UK employees and customers," said David Fleming, Amicus national secretary.

India gets 3,700 jobs

Amicus also said the decision would undermine the UK job market, especially for school leavers and graduates.

The UK has been complacent over the years, India is a fresh breath of intense competition
Sorabh, London

The union has warned that 12 locations across the UK will be affected by the cuts, a figure denied by the company.

In July this year Norwich Union shed nearly 900 jobs in Norwich, Cheadle, Perth and Worthing.

During the past year, Aviva's overall UK workforce has fallen by 3,000 staff to 36,000.

Global giant

Worldwide, Aviva now employs about 59,000 people, and by the end of 2004 the firm expects to have at least 3,700 of them in India.

Formed after merger of CGU and Norwich Union in 2000
UK's largest insurance group
World's seventh largest insurer
Operations in 30 countries
59,000 employees
25 million customers
Market value 10.8bn
Of the new posts created in India, approximately 350 will be call centre roles servicing UK customers, while another 2,000 staff will perform back office work including processing of UK insurance claims.

About 150 jobs will be created to support Aviva's general insurance business in Canada, although Aviva promises that there will be no job losses in Canada.

The company also says no jobs will be lost in Scotland, where it employs almost 3,000 people.

Aviva is the UK's largest insurance group, and was formed in a merger of Norwich Union with CGU.

Aviva shares finished the day 1.8% lower at 470.5 pence.

The BBC's Rory Cellan-Jones
"The trickle of jobs moving to India is turning into a flood"

Mike Robinson, Amicus
"Amicus is totally opposed to the company's proposal"

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