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Last Updated: Wednesday, 14 January, 2004, 17:25 GMT
Finance firms cut 1,100 UK jobs
Abbey logo
Scottish Provident staff had feared the worst news from Abbey
Finance sector workers have suffered a double blow with news that Abbey and Axa are to cut 1,100 UK jobs.

French insurance firm Axa said it was shedding up to 700 jobs, including 220 at Darlington and Morecambe.

Banking giant Abbey said it was closing offices in Warrington and Derby with the loss of 400 jobs and moving some telephone enquiry jobs to India.

But there was a reprieve for 700 staff at its Scottish Provident arm, based in Edinburgh, whose jobs will not be cut.

However, those jobs and 200 others will be moved to Glasgow by the end of 2004, with staff having the option of voluntary redundancy.

Union Amicus called the Scottish measure "redundancy by the back door".

We have taken some tough business decisions today that are absolutely necessary to the health of Abbey's future
Luqman Arnold,
Abbey chief executive
Axa said it would trim a further 480 jobs in addition to the Darlington and Morecambe posts, through efficiencies and as a result of plans to move some operations to India.

Abbey told BBC News Online that it would guarantee enhanced salary packages for the 900 Scottish workers, and that all workers would be supported if they wanted to make the move.

And it said it had reached the jobs' agreement after discussions with officially-recognised union Angu (Abbey National Group Union).

Five centres

Abbey currently has more than 40 sites in the UK, excluding branches, and said it wanted to moving to fewer, larger centres, based in five key locations.

I have no desire to move to the Glasgow office, whatever the incentives offered, as people have friends and family here
Carole Ritchie, Edinburgh
The company said it was investing 25m in IT, training and the sites in Belfast, Bradford, Glasgow, Milton Keynes and Sheffield.

"We have taken some tough business decisions today that are absolutely necessary to the health of Abbey's future and for giving our customers better service at a competitive price," said chief executive Luqman Arnold.

"We recognise that this will not be welcome news to the people affected, but we have also been able to take away uncertainty for others, and give reassurance that we are investing in our key locations."

The company said it had an agreement with Angu, that employees will be given at least six months' warning of site closures.

'Negotiated measures'

Angu said it had consistently made it clear to the company that the transfer of jobs abroad was wrong for employees, customers and the UK.

"Sadly, the company has refused to stop this initiative and so we have negotiated a range of measures to minimise the impact on our members and maximise their opportunity for redeployment within the company," said general secretary Linda Rolph.

Union Amicus, which is leading a campaign against the "offshoring" of call centre jobs, attacked the decision to move to India, saying it was a "fallacy" that customer service would be improved.

"Offshoring is purely intended to cut costs," said a spokesman.

And David Fleming, finance officer for Amicus, told BBC News Online: "Asking 900 people and their families to uproot from Edinburgh to Glasgow, or travel 50 miles to work every day is nothing more than redundancy by the back door."

The company says "staff will be offered enhanced packages to encourage them to relocate or commute to Glasgow".

Major overhaul

Abbey, which employs around 23,000 people in the UK, bought Edinburgh-based insurance business Scottish Provident in 2001.

It said it was not closing any aspect of its UK life, investment and protection businesses.

What the decision means for customers
Abbey insists that it is business as usual at Scottish Provident, which has 750,000 customers.
Scottish Provident will continue to sell protection products, such as critical illness cover
The Scottish Provident with-profits fund was closed to new business in August 2001
Amicus regional officer Hugh Scullion said before the meeting that Abbey had "refused to enter into meaningful consultation with the union".

Independent banking analyst Dr Catherine Smith said the moves made sense as Abbey as a whole was experiencing a general "slimming down".

Abbey embarked on a three-year overhaul of its operations in 2003 as it sank into the red with a 984m full-year loss following a disastrous foray into wholesale banking.

Abbey is selling its wholesale banking operations and restructuring its core UK personal financial services business.


Your comments:

I think it's a total sham. I know for a fact that the vast majority of people who work at Scottish Provident in Edinburgh (including myself) have no desire to move to the Glasgow office, whatever the incentives offered, as people have friends and family here, and personally I wouldn't want to commute. The real reason is the pilot scheme in India has worked very well, so our jobs can be done more cheaply there. No wonder they will be employing 400 extra people in Bangalore. I doubt very much that if all 700 people in Edinburgh decided to relocate to Glasgow, that there would be enough work for all of us! Abbey is trying to pretend they are not making us all redundant, but as they are closing the Edinburgh office, this is exactly what they are doing.
Carole Ritchie, Edinburgh, Scotland

I think the decision to 'move' the jobs to Glasgow is shocking. It shows a total disregard for their employees and families. Yet again ordinary people must suffer to appease shareholders. Even more worrying is the trend of moving jobs abroad, again showing how helpless and hopeless this government is against big business.
John Mac, Dundee

As customers have a choice to move their supplier, why should companies be questioned for their business decisions? After all they are doing business, not charity.
Prasad, Milton Keynes, UK

As a Scot from Edinburgh, living in London these past 15 years, it sounds quite strange hearing people equating commuting 50 miles to 'Redundancy by the Back Door'! I know people down here who commute daily from Cheltenham - 2 hours plus each way (tho this is admittedly a bit extreme)! As long as the 'enhanced' package covers the extra travel costs, and there are interest free loans for travel cards, as happens in London, there should not be any real complaint.
David, London, England

I fully sympathise with staff faced with such a predicament. My wife lost her job when an American owned company moved their operations from England to Puerto Rico on the basis of cost. However, at the end of the day a company has to achieve results to satisfy shareholders and clients. Therefore neither staff or the company escape unharmed in today's business world.
Mark Baillie, Southampton, England

It's a sign of the times that people need to move to where the work is. Modern business cares more about profits than its people, and with jobs being in short supply (especially in Scotland), many staff will not really have much choice but to move. It will mean a lot of uncertainty and stress for employees and their families affected by this decision.
Kevin Wilson, Glasgow, UK

Don't you think that as a nation already suffering almost total gridlock on the roads, Abbey are only adding to the congestion problem in somewhere like Glasgow or any other major city, if people then have to commute? I don't think Abbey have given a thought to the effect of the environment, just cutting costs, which could come back and bite them in the end with loss of customers!
J S, Portsmouth, England

It is always unfortunate when decisions like this are made - especially for the workers. However, having made the daily trip from Fife to Glasgow to work it is not that hard and, in my experience, was certainly easier than trying to get into central Edinburgh on a daily basis. A 1 hour commute with good train and motorway links is better than many workers have to put up with - especially if pay is enhanced to compensate. People in other parts of the country would be jealous of a 50 mile commute that takes an hour!!
Joe Parker, Dunfermline

Surely the staff are better off with jobs in Glasgow than India!! Companies have to make the right move for them and with Glasgow's Square Mile just launched on this occasion Edinburgh has missed the boat. I do feel sorry for staff but I moved up to Glasgow from Reading.
darren morris, glasgow

You can't expect a business organisation to define its strategy by where its current workers live. At least the jobs are not going abroad. People should shut up and deal with it - just as everyone else in the country has to deal with difficulties in a capitalist economy.
Rick Hough, Knutsford, Cheshire

Why is everyone complaining? Surely it's hardly a major upheaval travelling from Edinburgh to Glasgow every day considering most of the country spend an hour or more getting to work. As Darren Morris says, surely a little sacrifice is better than a P45!!!
ER, Belfast, N. Ireland

I agree that it is redundancy by the back door - it costs 231 a week which I'm sure Abbey will not meet in full and people will not do it. I certainly wouldn't in the long term.
Laura, Edinburgh

I agree with many comments that decisions like this cause stress and major emotional upset for those involved. However I think we have to look at why businesses are looking at reducing costs. For Abbey it is because their customers have a choice and can take their business away from Abbey if they are uncompetitive. The only option the government has if it wants to intervene is to force all customers to buy products from Abbey, forever, with no choice - would we want that? The answer is closer to home than we all realise - it's our own buying behavour that drives these business decisions, not 'big, bad business' as some comments have mentioned.
David Wilson, Edinburgh, Scotland

I believe that the Abbey has actually done more than any other business by offering the Scot Prov staff roles in their Glasgow office, plus increased packages. I also believe that the redundancy package offered by the Abbey is very generous. Many other companies have just closed their doors and given their staff statutory redundancy. At least the staff have options and their future is in their own hands. Unemployment or 45mins on a train. What would you choose?
Joseph, Glasgow

My company doesn't have a definition of what is classed to be a "reasonable" move and I was pressured into accepting a move which would have resulted in driving over a hundred miles a day - an increase of eighty five on my existing drive to work. For this I was offered an extra 3k a year for a transitional period. A supported house move was not an option. I drive a small car, probably too uncomfortable for driving three hours a day, that betters 50 mpg but I would still have been worse off financially given the increase in servicing costs and depreciation. No compensation at all was offered for the extra two hours a day out of the house. I didn't move and my choice was not well received by my company. I fully expect to be offered redundancy any day now......
Guy, Cambridge




SEE ALSO:
Anger over Abbey jobs switch
14 Jan 04  |  Scotland
Financial sector 'in good health'
13 Jan 04  |  Scotland
Job exports no myth, say unions
05 Dec 03  |  Business
Glasgow launches 'square kilometre'
19 Nov 03  |  Scotland
Abbey axes National habit
24 Sep 03  |  Business


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