CompaniesApr 18 2013

Aviva to cut 2,000 jobs as it seeks further cost savings

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Aviva will cut 2,000 jobs globally over the next six months in an effort to further reduce costs, representing a 6 per cent contraction in its existing total workforce.

Although the cuts will come from within the company’s UK business as well as that in Europe and Asia, the weighting of redundancies in each respective region is yet to be confirmed.

Employees were told of the decision yesterday (18 April).

The move comes on the back of a year of restructuring for Aviva, which it says have allowed it to realise £275m of annual cost savings against a target of in excess of £400m.

At its annual results in March, the company said it was targeting a further £400m of cuts after it posted a loss for 2012 of £3.1bn.

Savings thus far have come through disposals of non-core businesses in regions where it does not have a substantial presence, the latest of which saw it sell its Russian life business to Blagosostoyanie, a non-state pension fund in Russia, for €35m (£30.3m).

The firm has also implemented a pay freeze for its top 400 managers and cut all bonuses to executives for 2012.

Commenting on the latest cuts, Mark Wilson, group chief executive officer at Aviva, said: “I know this is difficult news for our employees but these changes are essential if we are to remain competitive.

“Aviva needs to become a more efficient and agile organisation to unlock its potential. We must take tough decisions on costs to provide our customers with great value products and ensure our future success.

“I am determined that Aviva gets through this phase of our business transformation as quickly as possible.”

The job reductions are part of a programme to reduce expenses across the whole business. At Aviva’s full year results published in March 2013, it announced it has realised £275 million annualised cost savings as part of its target to reduce costs by in excess of £400 million.