Scottish staff stunned by Norwich Union job cuts

Published on Friday 15 September 2006 01:03

Key quote

"It's not the Indians' fault. If you can get someone for 2p an hour and make profit out of it then that's what they're going to do." - Norwich Union worker

Story in full

BRITAIN's biggest insurer yesterday axed 4,000 jobs - including 450 in Scotland - and announced it is to move part of the workforce to India.

Staff leaving the Glasgow offices of Norwich Union, where 250 jobs were shed, and the firm's Perth base, where 200 jobs will go, said yesterday they were "shellshocked", claiming that they had known nothing of the impending cuts.

Currently 1,400 people are employed in Perth and 864 staff in Glasgow.

Unions expressed "disgust" at the cuts which come just a month after Norwich Union's parent company, Aviva, posted a 27 per cent hike in half-year profits of 1.7 billion.

Norwich Union said jobs had to go because customers were increasingly finding their own insurance online, and cheaper workers were available in India.

Half the job cuts will be through compulsory redundancies, and personnel losses in Scotland will be offset by the transfer of around 150 posts from Newcastle and Belfast to Dundee.

The staff redundancies are expected to save the company 50 million annually from 2008.

Patrick Snowball, Norwich Union chief executive, said: "We have to ensure that Norwich Union remains highly efficient. Customers' buying habits are changing rapidly as technology becomes more accessible.

"Already half of our new direct motor insurance policies are purchased over the internet."

Aviva also said its 107 BSM high-street driving schools would shut by next year. In future, lessons will be booked over the phone or on the internet, leading to 30 job losses at eight schools north of the Border.

The cuts follow 700 jobs going at the Lexmark printer plant in Rosyth and 270 at Edinburgh Crystal.

Workers in Perth said they had been instructed by Norwich Union management not to talk about the cuts.

However, one said: "It's not the Indians' fault. If you can get someone for 2p an hour and make profit out of it then that's what they're going to do." Alastair Dorward, president of Perthshire Chamber of Commerce, said:

"Perth and Kinross is reliant on the call-centre economy and it is alarming to learn of such a large number of redundancies in this sector."

Workers outside the Glasgow base in West Regent Street were "shellshocked" and "numb", while others attacked the way they had been informed.

One female worker said: "I am utterly disgusted. We knew nothing about this before we came in to work this morning."

David Fleming, Amicus national officer, hit out at yet more call-centre jobs going to India, saying: "This is absolutely brutal and compulsory job cuts and offshoring will not be accepted by us or our members."

Roseanna Cunningham, SNP MSP for Perth, met Mr Snowball to express her anger at the job losses in the town where workers have helped Norwich Union to post massive profits.

• Meanwhile in Hawick, ten jobs are going at luxury cashmere manufacturers Johnstons of Elgin, due to tough international competition and soaring fuel prices.

Johnstons employ 700 people overall - 260 in Hawick - but remain optimistic of their future in the cashmere trade.

The pride of Perth

NORWICH Union's job cuts will be a particular blow to the Perth area, where the insurance industry has long played a central role.

In 1885 the firm General Accident was founded in the town by a group of local businessmen.

The company originally concentrated on business in the community - its first policy was issued to a cabinet-maker.

But the headquarters, at the post office building in Tay St, soon became the hub of an international operation as the firm expanded to Canada, New Zealand and eventually America.

By the time a new head office was opened at Piheavlis in 1983, the business was the main engine of the area's economy.

In 1897 General Accident's southern competitor, Norwich Union, failed to take over the Perth company. It would be more than a century before the two firms eventually merged in 2000.

Fears immediately surfaced over job security after Aviva incorporated the Norwich Union brand in 2002.

But Perth emerged largely unscathed from the first round of job cuts in 2003 after the insurer shifted 2,350 jobs to India.

Aviva now has sites in Bangalore, Pune and Noida and Sri Lanka.