Aviva, the UK’s biggest insurance firm, is cutting 1,800 jobs over the next three years in an effort to cut costs.
The firm’s new chief executive, Maurice Tulloch, who replaced Mark Wilson in March, wants to lower annual costs by £300m by 2022, and his plans include cuts to its 30,000 global workforce.
Savings will also come from lower spending at its headquarters and on contractors and consultants, and reduced project spending, taking aim at Wilson’s “digital garage” in east London. Aviva said it had not decided exactly where the job cuts would fall, and that businesses around the world would be asked to reduce costs.
Aviva has 33 million customers and is the UK’s biggest general insurer, serving one in four UK households. Its international operations, which Tulloch ran before being promoted to the top job, include France, Italy, Poland, Turkey, Canada, India and China.
More than half the insurer’s total workforce – 16,500 people – work in the UK. Norwich is its biggest site, with 5,200 staff. Other locations include London, York, Sheffield and sites across Scotland.
The firm has started consulting the Unite union in the UK and and its own staff representative body. Aviva said it would try to keep compulsory redundancies to a minimum by not filling vacancies and seeking voluntary redundancies.
Andy Case at Unite said Aviva staff in the UK would be shocked. “The scale of this role reduction will be met with disbelief across the company,” he said.
“Unite have arranged urgent discussions with Aviva management in order to ascertain the rationale for cutting an already extremely stretched workforce. Unite has made it clear to management that the union will strongly challenge any attempt to make compulsory redundancies. Instead, any staff reductions must be found through volunteers, natural attrition, reducing reliance on contractors and redeployment.”
Tulloch has also split the management of Aviva’s UK life and general insurance units, and reiterated a target to cut the company’s £8.9bn debts by at least £1.5bn over three years.
Tulloch said the changes were the first step in his plan to make Aviva “simpler, more competitive and more commercial”.
“Reducing Aviva’s costs is essential to remain competitive and this means tough decisions and job losses which I do not take lightly. We will do all we can to minimise redundancies and support our people through this.”
The new Aviva boss is trying to revive the business after years of stagnation and poor share price performance, following the £5.6bn acquisition of Friends Life in 2015.
Aviva’s domestic rivals – Prudential and Legal & General – have fared better in recent years by focusing on life cover and pensions rather than general insurance.
In another change at the top of the company, Aviva’s finance chief, Tom Stoddard, stepped down on Wednesday.
Tulloch’s predecessor Wilson quit last October after Aviva decided it was time for new leadership. The company was run by its non-executive chairman, Sir Adrian Montague, until Tulloch took the helm in March.