Scottish Aviva jobs under threat

BRITAIN’S largest insurer, Aviva, yesterday refused to rule out job cuts across its 3,350-strong Scottish workforce, as it revealed that, by 2007, it plans to have moved 7,000 UK jobs to low-cost centres in Asia.

The world’s fifth-largest insurer has already moved 3,700 mainly administrative jobs to India and is planning to move 3,300 more between now and the end of 2007. Next year alone, around 950 jobs will be shifted abroad, with about 760 going to India and another 190 to Sri Lanka.

The group, which operates as Norwich Union in Britain, said the move would result in about 150 compulsory redundancies during 2005, with the remaining 800 cuts being achieved through natural wastage and early retirement. While York and Norwich will bear the brunt of the initial losses this time around, another 2,350 jobs are due to be slashed during 2006 and 2007.

Even though the workforce in Perth, Glasgow and Dundee has so far escaped the cutbacks unscathed, a spokesman yesterday refused to rule-out any job cuts between now and 2007.

"We’re going to have to make cuts all over the country," she said. "But clearly it’s very difficult to say which areas will be hit. The point of the announcement was to clarify what our plans are, and to give a final figure. So it would be wrong to rule Scotland out."

She added that a decision on further cuts was likely to be made within six months.

The move comes in the wake of a huge shake-up at the group, which has suffered in recent years as share prices slumped, denting demand for pensions and insurance. Despite unveiling annual profits of 1.9 billion in February, the firm said it would be cutting costs in an effort to save 250 million a year.

"We operate in very competitive markets where customers continually seek better value for money and quality of service," Norwich Union Life chief executive Gary Withers said. "The experience of our existing offshore operations shows that the service levels in India continue to match those that we achieve in our UK operations."

He added that he did not expect strike action, despite an angry response from trade union Amicus, which claimed the move "points to a bleak future for the UK financial services industry".

David Fleming, Amicus’s head of financial services, said: "Norwich Union has at last revealed its true intentions. We will not accept compulsory redundancies as a consequence of offshoring, and that will be fundamental to our negotiations with Norwich Union."

He added that the worst thing about it was that "it’s a quick, short-term profit regime that doesn’t stand the business in good stead".