Aviva cuts Scottish expansion by half as crunch bites

Published on Monday 1 June 2009 21:33

INSURANCE giant Aviva has scaled back plans for expansion in Scotland as part of its strategy for coping with the credit crunch.

David McMillan, chief operating officer for Aviva's general insurance arm, told The Scotsman yesterday the group was likely to take on only around half the 500 extra workers it had planned to recruit when it restructured the business last year.

The company, which yesterday officially rebranded its Norwich Union insurance arm as Aviva, has around 3,000 staff north of the Border – making up 16 per cent of its UK workforce.

Last year, Aviva announced it was to shut a number of its UK bases, including offices in Glasgow and Dundee.

But it said it would also create jobs by boosting its bases at Perth and Bishopbriggs to make them into two of seven centres UK-wide which would bring together customer services, claims, sales and back office administration facilities.

Almost all of the 330 staff previously based in Glasgow and Dundee were given jobs in the Perth and Bishopbriggs centres.

McMillan said: "When we started out with this journey of restructuring, we had estimated 400 to 500 more jobs across the two Scottish sites. But the current climate has meant we're probably looking at around half that now.

"We reported record sales across the globe and record operating profits, but like the rest of the financial services industry, we have not been unaffected by what has been going on in the stock markets."

He said the firm would not rule out boosting staff numbers again once the recession is over.

He added: "Around 90 per cent of the Glasgow and Dundee staff were redeployed to the Perth and Bishopbriggs centres and those who did move (from Aviva] chose not to take up the alternative jobs for personal reasons."

Last summer, the Norwich Union arm announced it would cut 1,800 jobs by 2010 across its UK operations as part of the restructuring of the business.

The company marked its rebranding yesterday with a range of events at its Scottish offices, as well as a nationwide TV advertising campaign involving celebrities including Ringo Starr and Bruce Willis.