Boardroom failure will cost jobs at Aviva, says union

The Norwich-based insurance group, which employs 18,500 people in the UK, has warned up to 800 jobs could be lost under a restructuring exercise being overseen by new chairman John McFarlane.

He took the helm earlier this year after chief executive Andrew Moss stepped down following a shareholder revolt over pay and share price performance. But David Fleming, national officer for the Unite union, said: “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.”

Aviva said up to 800 UK jobs were at risk but its record of keeping reductions to a minimum meant the figure was likely to be lower.

Mr McFarlane, who has already begun the process of jettisoning non-core businesses, hopes to save £400m by 2014 through simplifying the business.

Mr Fleming urged Aviva to “come clean” about the extent of the programme in the UK and added: “What started out as an initiative to cut bureaucracy and duplication at senior and middle management levels under the banner of ‘Project Simplify’ has quietly turned into a major job cuts programme.”

Aviva recently announced a 10 per cent drop in half-year operating profits to £935m, reflecting restructuring costs and lower returns from its life and pensions operations in the eurozone. It employs 4,800 staff in Yorkshire – about 300 in Leeds, 1,700 in Sheffield and 2,800 in York, where its life and pensions business is based.

A spokesman said: “Up to 800 roles could be at risk although in practice it will be fewer than this because of natural turnover, voluntary redundancies and redeployment opportunities. There will also be some new roles in growth areas.

“It’s too early to say what the impact will be in Yorkshire, there will be reductions across the UK.”