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Last Updated: Wednesday, 9 June, 2004, 12:39 GMT 13:39 UK
Norwich Union to cut 700 UK jobs
Norwich Union office worker
The insurer is axing 700 staff
Insurance giant Norwich Union is to shed 700 jobs as part of cost-cutting drive at the company.

Jobs will be lost at five of the firm's UK sites - Norwich, York, Bristol, Stevenage and Croydon.

The UK's biggest insurer said the jobs are going from its life businesses services division, blaming "tough" market conditions for the cutbacks.

The Amicus union said workers would be "devastated" and added it would be meeting management in the next few days

Efficiency drive

The insurer added that the restructuring will be completed by the end of 2005 and the work currently undertaken by staff affected by the cuts will be outsourced to other companies.

In addition to the staff cuts the group will also cut a further 250 contract workers from the division.

"Decisions that affect staff in this way are never easy to make," said chief executive Gary Withers.

"However, recent market conditions in the UK long-term savings market have been tough and we have to ensure that the company continues its drive for efficiency."

Amicus national officer Dave Fleming said: "We will vigorously oppose any compulsory redundancies and any offshoring of these jobs abroad."

Restructuring

Norwich Union and its parent company Aviva currently employs 33,000 staff - 1,500 of which work in the affected division.

In December the insurance giant had said it was to embark upon a huge restructuring drive.

It has suffered in recent years as share prices slumped, putting off investors and denting demand for pensions and insurance.

In February, after unveiling improved annual profits of 1.9bn, parent company Aviva added that it aimed to save 250m a year.

More jobs axed

In a further jobs blow to the insurance industry, Royal London also announced plans to close its direct sales force with the loss of 380 jobs.

Around 50 jobs will be lost from the division's main office in Wilmslow, Cheshire, with the rest going across the UK.

The mutual insurer said that despite improvements in the performance of the operation it could not move into profitability, and was no longer economical to operate.

Instead of selling products face-to-face, the group said it would now move to selling through intermediaries, such as independent financial advisers.

"For Royal London the economics of face-to-face advice through a direct sales force just don't add up any longer," said group chief executive Mike Yardley.

Royal London's decision to axe its direct sales follows similar moves by Prudential, Pearl and Britannic.


WATCH AND LISTEN
John Ainley, Norwich Union Human Resources Director
"We believe this will improve customer service"



SEE ALSO:
Norwich Union cuts savers returns
29 Apr 04  |  Business
York firm switches jobs to India
09 Apr 04  |  North Yorkshire
Insurer 'maps' UK in flood fight
03 Mar 04  |  Business
Cost cuts help lift Aviva profits
25 Feb 04  |  Business
Norwich Union cuts bonus payouts
13 Jan 04  |  Business


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