Union slams Aviva job cuts

The Norwich-based insurance group, which employs 18,500 people in the UK including almost 5,000 in Yorkshire, has warned that up to 800 jobs could be lost under a restructuring 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 role reductions to a minimum meant the figure was likely to be lower.

It employs 4,800 staff in Yorkshire, with about 300 in Leeds, 1,700 in Sheffield and 2,800 in York, where its life and pensions business UK life is based.

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 cost-cutting programme in the UK.

He said: “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 beleaguered eurozone.

At the time, David Barral, chief executive of UK Life, which is based in York, said job cuts were inevitable. “Our own staff tell us there are too many decision-makers and too many layers to get things done.

“We’ve got a situation where managers are managing two or three people. We’re going to have a disproportionate impact on middle management. That will lead to people leaving the business, and is leading to people leaving the business.

“This is about eliminating bureaucracy and improving individual accountability. (We are) having to say goodbye to some good people.”

Mr Barral declined to say how many staff will go, but said “everyone will know where they stand in September”.

An Aviva spokesman said yesterday: “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 with Aviva. There will also be some new roles in growth areas.

“We recognise this is a difficult time for employees and will do everything we can to support them as we continue with our consultation process.

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