Standard Life job cuts aim to end last 'mutual ties'

Published on Tuesday 31 August 2010 22:18

SWINGEING jobs cuts announced at Standard Life yesterday will bring its costs in line with competitors, after analysts branded the firm's outgoings as being "mutual-esque" four years after the company became a publicly listed firm.

Eamonn Flanagan of stock broker Shore Capital said: "It is not a cause for alarm or a sign of a double dip. Maybe it is a hangover from the mutual days. It has been a PLC for quite a while now and maybe the cost structure should reflect that.

"The cost base is still mutual-esque - on the generous side - so if they compete with the likes of Pru, Legal & General and Aviva they need to be sharper and more focused."

Barry Cameron, head of media relations for Standard Life, admitted that the cuts addressed "inefficiencies" as the firm adapted to new regulations about the sale of financial products and customers using the internet.

"We came through the financial crisis in robust shape but that is no reason for us to rest on our laurels. We are in an industry and a sector which is changing and increasingly needs to have digital capability to deal with consumers and IFAs who want to deal with us through platforms and online."

He added: "There are inefficiencies, and overlaps and duplications in our business which we think we can remove."

He said that the job cuts "would go towards" meeting the target of slashing 100 million in annual costs from the group by 2012.

Owen Kelly, chief executive of Scottish Financial Enterprise, said: "While job losses are always regrettable for those affected, these steps are clearly aimed at equipping Standard Life for future growth. The company's business results have been robustly successful in difficult markets and this refocusing of effort on core business will help to continue that trend."

Flanagan also warned against cutting jobs "too deeply too quickly".

"If you undercut your medium-term profitability it is a false economy," he said.

Standard Life shares closed up 7.1p, or 3.5 per cent, at 210.9p yesterday.