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Norwich Union cuts 4,000 UK jobs Norwich Union cuts 4,000 UK jobs
(about 1 hour later)
The UK's biggest insurer, Aviva, has unveiled plans to cut 4,000 jobs at its Norwich Union business by 2008 as it seeks to cut costs.The UK's biggest insurer, Aviva, has unveiled plans to cut 4,000 jobs at its Norwich Union business by 2008 as it seeks to cut costs.
Aviva said that about half of the job reductions would come through compulsory redundancies.Aviva said that about half of the job reductions would come through compulsory redundancies.
It added that that up to 1,000 jobs would be shifted to India, and another 500 IT posts would be outsourced.It added that that up to 1,000 jobs would be shifted to India, and another 500 IT posts would be outsourced.
Workers' union Amicus called the move disappointing and said its view on the cuts was one of "extreme anger".Workers' union Amicus called the move disappointing and said its view on the cuts was one of "extreme anger".
Tough choicesTough choices
Aviva is not alone in having to revamp its operations as consumers change the way they buy insurance, with many turning away from High Street shops and doing their shopping online.Aviva is not alone in having to revamp its operations as consumers change the way they buy insurance, with many turning away from High Street shops and doing their shopping online.
WHERE THE JOBS WILL GO Norwich 850York 450Glasgow 250Sheffield 250Cambridge 200Perth 200Newcastle 200Eastleigh 200Stevenage 150Bristol 150Worthing 100Belfast 100Birmingham 50 Source: Norwich UnionWHERE THE JOBS WILL GO Norwich 850York 450Glasgow 250Sheffield 250Cambridge 200Perth 200Newcastle 200Eastleigh 200Stevenage 150Bristol 150Worthing 100Belfast 100Birmingham 50 Source: Norwich Union
In June, Royal & Sun Alliance announced plans to cut 1,550 jobs by June 2008 and analysts are predicting further consolidation in the insurance market. In June, Royal & Sun Alliance announced plans to cut 1,550 jobs by 2008 and analysts are predicting further consolidation in the insurance market.
Aviva failed in its attempt to buy UK rival Prudential earlier this year and the latest job cuts are seen by many experts as an attempt by the firm's management to ensure that it is not snapped up by a larger European rival.Aviva failed in its attempt to buy UK rival Prudential earlier this year and the latest job cuts are seen by many experts as an attempt by the firm's management to ensure that it is not snapped up by a larger European rival.
David Fleming of Amicus told the BBC's Today programme that the union had "a zero tolerance of off-shoring jobs leading to compulsory redundancies". David Fleming, from the Amicus union, told the BBC's Today programme that it had "a zero tolerance of off-shoring jobs leading to compulsory redundancies".
Aviva and unions will now start a consultation period and Amicus said it would "consult with our members to see what they want to do".Aviva and unions will now start a consultation period and Amicus said it would "consult with our members to see what they want to do".
'Self-service world' Trimming down
Aviva said the offshoring was part of earlier-announced plans to move 7,800 jobs overseas by the end of next year. Aviva said the offshoring was part of previously announced plans to move 7,800 jobs overseas by the end of next year.
The company said it would look to "minimise the number of compulsory redundancies", but added that it needed to make difficult decisions if it wanted to safeguard future profitability and its industry position.
Consumers, independent financial advisers and brokers are increasingly operating in a self-service world Patrick Snowball, Norwich Union executive chairman See Aviva's share priceConsumers, independent financial advisers and brokers are increasingly operating in a self-service world Patrick Snowball, Norwich Union executive chairman See Aviva's share price
The company said it would look to "minimise the number of compulsory redundancies", but added that it needed to make difficult decisions if it wanted to safeguard future profitability and its industry position.
Aviva said that while it would be shutting some offices in cities such as Belfast, Glasgow, Newcastle, Norwich and Cambridge, it would not completely shut down operations in those locations.Aviva said that while it would be shutting some offices in cities such as Belfast, Glasgow, Newcastle, Norwich and Cambridge, it would not completely shut down operations in those locations.
Staff affected by the latest job cuts would be offered retraining and the chance to move within the company, a spokeswoman explained. Staff affected by the latest job cuts will be offered retraining and the chance to move within the company.
Patrick Snowball, the executive chairman of Norwich Union, said that changes in consumer habits meant that the company was operating in an "increasingly competitive and dynamic environment". Much of the criticism directed at Aviva comes after the company announced that half-year profits jumped by 27% to £1.7bn, helped by foreign expansion and strong growth in the UK pensions market.
Sales drive
Patrick Snowball, the firm's executive chairman, said changes in consumer habits meant that it was operating in an "increasingly competitive and dynamic environment".
Norwich Union wants to maximise it use of office space
"Consumers, independent financial advisers and brokers are increasingly operating in a self-service world," he said."Consumers, independent financial advisers and brokers are increasingly operating in a self-service world," he said.
Mr Snowball added that the internet was revolutionising the way the insurance industry worked.
"Customer's buying habits are changing rapidly as technology becomes more accessible, demonstrated by the fact that 50% of our new direct motor insurance policies are now bought online."
Aviva added that the job cuts would save it £250m in 2008 and would help smooth the integration of divisions such as car insurance and recovery company RAC.
Aviva also said that it was planning to shut down 107 BSM driving school offices by 2007 as more people book their lessons online.

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