Insurance giant Norwich Union is to axe around half of its workforce in Birmingham – cutting nearly 300 jobs – as part of a major restructuring of its general insurance arm over the next two years.
In a shock move, owner Aviva said it planned to consolidate the operational functions of its Norwich Union Insurance (NUI) business into seven centres at Norwich, Perth, Bishopbriggs, Stretford, Manchester, Leicester and Southend.
It will withdraw NUI operational work from offices at Birmingham, Dundee, Glasgow city centre, Leeds, Sheffield, Liverpool, Cheadle, Bristol, Southampton, Basildon, Ipswich, Exeter and Worthing.
This will happen over the next two years and could result in between 1,500 and 1,800 redundancies by the end of 2010.
A total of 22 offices will be affected, with some buildings due to close and staff moved into smaller accommodation in the same towns and cities.
In Birmingham around 270 out of 600 staff at two offices will affected, although they will be offered the chance of redeployment. The firm’s CU House premises in Corporation Street are to go, but it will be retaining Lombard House in Great Charles Street.
After a number of mergers and acquisitions, Aviva said its NUI operations had become complex, with too many products, processes, systems and locations.
The company employs 30,000 people in the UK, with around 18,000 staff working in general insurance in 52 towns and cities in the UK.
However, Aviva will still have a presence in the locations mentioned as the sites also house staff working for other parts of Norwich Union.
Norwich Union is the UK’s largest general insurer, with a market share of about 15 per cent, and a major provider of life, pensions and investment products.
Graham Goddard, Unite deputy general secretary, said: “This news for staff that their jobs are now in jeopardy is truly devastating.
“The business changes announced will impact some 22 locations across the country. The Aviva workforce from the general insurance arm now faces uncertainty about their future.”
He said union representatives planned to meet management to discuss the changes and ensure that staff were fully supported.
Mr Goddard added: “Aviva general insurance 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 union now has serious questions about how Aviva will be able to deliver on their commitment to ‘One Aviva Twice the Value’ with one more round of brutal job cuts.”
It said the number of roles in general insurance would be reduced over the next two years, with the company looking to transfer employees to other locations or to other parts of the business.
Aviva expected that this approach, along with normal staff turnover, would mean there would be about 1,500 to 1,800 redundancies by the end of 2010.
Igal Mayer, chief executive of Norwich Union Insurance, 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, consolidating our expertise into seven insurance centres of the future in the UK.
“This is a transformation that will take place over the next two years and will provide our employees with the products, processes and technology to give our customers and business partners excellent service, right the first time, every time.”