In a bid to save £400 million, bosses at FTSE 100 insurance company Aviva have announced that up to 800 jobs will be axed at their commercial properties throughout the UK. Staff were warned that a restructuring programme, due to be put in place by the end of the year, meant that only 70 per cent of the company’s 18,500 British employees would be guaranteed job safety.
An internal announcement was distributed to staff working within the UK Life and Pensions department warning of the imminent job losses last Thursday.
It said; “We want to make sure that we can give certainty to as many individuals as we can and where this has been possible we have confirmed people into roles.
“I am pleased to say that today we have confirmed circa 70 per cent of individuals at grade A-E into roles across the Life business.
“Please be aware that this does mean that for some areas there will be wider impacts on individuals who will have to go through an assessment and selection process.”
A spokesperson for Aviva expressed the company’s desire to allot the remaining 30 per cent of employees into new roles, meaning that the total number of job losses would be no greater than 800.
Aviva’s restructuring programme was announced earlier this year, after chief executive Andrew Moss was removed from the company thanks to a shareholder revolt. Since May, chairman John McFarlane has taken over the running of the company until a suitable replacement for Mr Moss can be found.
Unfortunately, it seems that the job losses may be a necessary step in keeping the UK’s second largest insurance group afloat. Last month, the Group were forced to post losses of £456 million for the first half of the year. This was partially due to a write down in the value of its operations in the United States, which altogether totalled £876 million.
As a response to the insurer’s failing fortunes, Mr McFarlane launched the restructuring programme, which includes steps such as boosting the company’s capital base, disposing of unprofitable businesses and, of course, decreasing the number of employees working in Aviva offices throughout the country.
However, Unite the union national officer David Fleming has spoken out against the cuts, saying that Aviva has not been honest about the number of losses expected and urging the employer to “come clean”.
He said; “It is absolutely appalling that Aviva has consistently failed to disclose the total number of jobs being cut. It is time for the company to come clean on the numbers.
“Our members face being asked to pay the price of boardroom failure and Unite is dismayed that what started out as a shareholders’ revolt on executive pay will result in a jobs cull.
“This is totally unacceptable.”
It is clear that urgent action must be taken by the board of the insurance group in order to remain operational within the UK. However, the question is whether this latest wave of redundancies will help the company regain its footing on the corporate ladder or if consumer goodwill will turn customers against them completely.
Do you believe that companies such as Aviva are doing the right thing in letting go hundreds of staff members during the recession? Or do you think that the public become disenchanted with big businesses that refuse to remain loyal to their commercial property employees? Let us know what you think in the comments section below.
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