* Announces fresh redundancies as cost cutting continues
* Plans to revise redundancy terms anger Britain's largest
By Anjuli Davies and Sinead Cruise
LONDON, April 18 British insurer Aviva Plc
is to cut 2,000 jobs and slash redundancy payouts in the
process, setting up a showdown with the country's biggest trade
union as it attempts to cut costs and mollify shareholders after
a recent investor revolt.
Chief Executive Mark Wilson said the cuts would equate to
around 6 percent of the global workforce over the next six
months and reflected the group's commitment to deliver more than
400 million pounds ($609 million) in cost savings by year-end.
Aviva, which employs around 31,200 people, said it would
also overhaul its redundancy policy for all employees on UK
contracts. From May, pay will be capped at 78 weeks of service
and from December, staff will only receive two weeks' pay for
each year of service, rather than a current four weeks' pay.
"I know this is difficult news for our employees but these
changes are essential," Wilson said in a statement. "Aviva needs
to become a more efficient and agile organisation."
Aviva launched an overhaul of its business last year after
spiralling costs and poor share price performance triggered an
investor revolt that forced out former CEO Andrew Moss. Chairman
John McFarlane subsequently drew up a review promising savings
from the sale or closure of more than a dozen underperforming
units across its insurance and asset management operations.
Britain's largest trade union Unite branded the group's
planned reforms in its redundancy terms "a callous and
disgraceful act" on Thursday.
"...the UK workforce, which is the backbone of the company,
has suffered job cuts, pay freezes and now faces an attack on
their redundancy terms, when the company is planning more cuts,"
National Officer Dominic Hook said. "Unite will give staff all
the support possible to oppose any job losses in the UK and the
cuts to redundancy terms."
Aviva cut 2,500 jobs globally last year and has made
annualised cost savings of 275 million pounds through its
efforts so far.
It gave no details on Thursday where the axe would fall but
said it was consulting with relevant staff representatives and
would provide further information on the roles affected as soon
as the detail was available.
"(It's) sad news for those affected but Aviva needs to
become more competitive," Panmure Gordon analyst Barrie Cornes
told Reuters. "We would anticipate that a significant number of
the 2,000 job losses will be lost from the UK, given its
significant market share here in both life and non-life."
Wilson, who took the helm in January, slashed the 2012
dividend by more than a quarter in March to repay debt, as the
company reported a 15 percent drop in operating profit to 2.13
billion pounds, broadly in line with forecasts.
Aviva shares were flat at 294.4 pence by 1342 GMT, broadly
in line with London's top blue chip companies.