UK-based insurer Aviva is set to slash 1,800 jobs over the next three years.
This was announced in an investor update which set out plans to reduce costs by £300m ($380m) a year for the insurance firm.
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Aviva jobs lost to lower costs
Cost reductions not only affect Aviva jobs. Reductions will be also achieved through lower central costs, savings in contractor and consultant spend, reduction in project expenditure and other methods.
In addition, Aviva’s life and general insurance businesses in the UK will be split. The digital direct business will be integrated with UK General Insurance. The firm hopes this will encourage greater accountability and stronger management focus.
CEO Maurice Tulloch, who took over in March, said: “Today is the first step in our plan to make Aviva simpler, more competitive and more commercial. We have strong foundations: excellent distribution, world class insurance expertise, and our balance sheet is robust.
“But there are also clear opportunities to improve. 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.
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By GlobalData“I am also determined to crack Aviva’s complexity, an issue which has held back our performance for too long. Today’s changes will begin to reduce complexity, cost, and duplication, enabling Aviva to be better at serving our customers and delivering stronger results for our shareholders.
“The sustainability and security of our dividend is paramount. We are focused on improving our performance to grow capital generation and cash-flow.
Andy Case, Unite Aviva officer, said: “The Aviva workforce in the UK will be shocked by the news that their employer plans to shed 1,800 roles globally over the course of the coming three years. The scale of this role reduction will be met with disbelief across the company.
“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.”
Role shift
In addition, Aviva’s CFO has decided to step down. Tom Stoddard will step down on 30 June 2019. He will be replaced by Jason Windsor, currently Chief Financial Officer of Aviva UK Insurance.
Stoddard said: “Whilst I will miss all the friends I have made here, Aviva has a strong finance team, and it is now time for me to clear the way for others to step up, as I consider new opportunities. Aviva is in a strong financial position with a bright future ahead of it. I have thoroughly enjoyed working with Maurice and I wish him, Jason, and everyone who works for Aviva all the best for the future.”
