1,500 jobs on the line at insurance giant Aviva

The cuts represent almost 5 per cent of the 31,500-strong combined headcount of both firms. Picture: AFP/Getty
The cuts represent almost 5 per cent of the 31,500-strong combined headcount of both firms. Picture: AFP/Getty
Share this article
0
Have your say

INSURANCE group Aviva yesterday warned that 1,500 jobs are at risk as a result of its £5.6 billion deal to buy rival company Friends Life.

The firm, which has about 2,500 staff in Scotland, said it had not yet identified which specific roles or locations were under threat.

Aviva’s main Scottish sites are in Perth and Bishopbriggs, and the group said it was seeking to save £225 million annually by the end of 2017, following its acquisition of Friends Life.

The cuts represent almost

5 per cent of the 31,500-strong combined headcount of both firms.

The proposed job losses were revealed in a prospectus issued to City investors ahead of voting on the deal at the end of March. The deal with Friends Life is the biggest in the industry since the merger of CGU and Norwich Union created the company now known as Aviva in 2000.

In a statement issued yesterday, the insurance firm said: “Aviva is looking to achieve cost synergies in those areas where it identifies there to be duplication. Aviva anticipates that this may result in a reduction of approximately 1,500 roles from the headcount of the enlarged Aviva group of 31,500.

“At this stage, no specific teams, roles or locations have been identified.”

The company currently employs around 28,000 staff worldwide, including 12,000 in the UK and 5,000 in its UK life and pensions division. Friends Life has 3,550 UK staff, largely in offices in Bristol, Dorking, Manchester and London.

Aviva’s UK staff are in York, Norwich, Sheffield and Glasgow, although there is no overlap between Friends and Aviva’s general insurance arm.

Britain’s largest union, Unite,, which represents around 4,000 members across both companies, said they will work with the company to try to avoid job losses.

They also warned Aviva that attempts to cut costs would do nothing for the future of the new company and said customer service would suffer.

Unite national officer Dominic Hook said: “Unite will be seeking assurances from Aviva that the takeover of Friends Life will not be used as an excuse to slash jobs and erode terms and conditions of staff in the pursuit of £225m cost savings.

“Unite will actively engage with Aviva and Friends Life to avoid job losses.

“The skills and experience of the long-serving staff across Friends Life and Aviva will form the basis of the future success of the new company.

“Now, both Aviva and Friends Life need to give their staff clarity and assurances about the future of the combined workforce in the new company.”

If the takeover is backed by shareholders and goes ahead as planned by the spring, Aviva will become the UK’s leading insurance, savings and asset management business by number of customers.

An Aviva spokeswoman said yesterday: “We appreciate that this news may be disconcerting for employees and we would look to ensure that any redundancies are kept to a minimum wherever possible, by using vacancies and natural turnover.”

A Scottish Government spokesperson said: “This will be a particularly anxious time for employees and their families.

“The Scottish Government will do everything it can to provide support and help to anyone affected.”