Insurer Aviva announces 1,800 jobs to go

By Simon English for MailOnline
Updated: 08:30 EDT, 6 June 2008

Insurance giant Aviva is cutting between 1500 and 1800 jobs across the country, sparking fury from unions.

Consolidation: Are days numbered for the Norwich Union brand?

The shocking move comes just two years after it axed 4000 staff and shifted part of its workforce to India.

Aviva presented the move as an attempt to 'improve service and drive growth' as part of chief executive Andrew Moss's vision of delivering 'one Aviva, twice the value'.

Moss wants to double returns to shareholders by 2012, partly by growing the business but also with cost cuts.

This is one of the biggest single-day job cut announcements from the finance sector for years, leaving the unions fearful that rivals will follow suit.

The insurance operations will be shifted away from big cities and based in seven so-called 'centres of excellence' in Norwich, Perth, Glasgow, Manchester, Leicester and Southend.

The redundancy programme will take two years to complete, with staff offered transfers to new sites where possible.

Unite called the decision 'brutal' and 'truly devastating'. Deputy general secretary Graham Goodard said: 'Aviva is rapidly withdrawing their commitment to local communities and isolating themselves in a small number of cities.

'The suggestion that employees will be able to relocate appears to be inconceivable for most of those affected.'

The move comes weeks after Aviva said it would ditch the 200-year-old Norwich Union brand, one of the best known names in finance. Moss wants to concentrate everything in the group under one brand, noting that 60% of its business comes from outside the UK.

Igal Mayer, who heads the Norwich Union arm, said: 'We are a very strong business that has grown over the years into a complex organisation. We want to deliver excellent, consistent and reliable customer service with market leading efficiency. To achieve this we will need to fundamentally simplify our business.'

He added that the move represented a 'significant operational change' but offered no words of regret for the sackings.

The shake-up, he said, would 'provide our employees with the products, processes and technology to give our customers and business partners excellent service, right the first time, every time'.

The credit crunch and a sluggish stock market have led to thousands of job cuts in the City with many more expected. Roughly one in 10 jobs in financial services is expected to go.

Norwich Union started up in 1797 and was the first company to offer fire insurance. Aviva was formed from the merger of Norwich Union and CGU in 2000. It manages funds of £364bn.