Aviva has revealed as part of the acquisition of Friends Life there may be about 1,500 job losses across the enlarged insurance group.
In a circular to shareholders yesterday (19 January), Aviva stated it is looking to deliver about £225m of annual savings by the end of 2017.
This may result in a reduction of about 1,500 roles from a new total of around 31,500 people, the circular stated.
A spokesperson from the company stated the acquisition is “financially and strategically compelling”, delivering increased cash flows, reduced leverage and continued growth in the dividend.
“We appreciate that this news may be disconcerting for employees and we would look to ensure that any redundancies are kept to a minimum wherever possible, by using vacancies and natural turnover, for example.
“At this stage, no specific teams, roles or locations have been identified as the proposed transaction has not completed. When we are clearer on this, following completion of the deal, we will fully engage and consult with employees and their representative bodies.”
The financial terms of the £5.6bn merger were agreed in early December, paving the way to create the UK’s largest insurance, savings and asset-management company.
BNP Paribas research suggested that the deal could mean significant job losses at Friends Life and £100m of expense synergies.
The BNP Paribas research stated: “At the end of 2013, Friends Life employed 3,872 staff (including 325 or so at Lombard). We see very heavy job losses and synergies resulting from this proposed merger.”
peter.walker@ft.com
