Aviva axes 1,800 jobs as it aims to cut costs ahead of the business being broken up
Aviva’s boss has unveiled plans to axe 1,800 jobs and pave the way for a break-up of the business.
Maurice Tulloch, who was appointed in March, said the revamp would make the firm leaner and more competitive.
It will see the UK’s biggest insurer cut costs by £300million a year by slashing jobs, spending less money on projects and reducing the use of contractors.
Aviva, the UK’s biggest insurer aims to cut costs by £300m a year by slashing jobs, spending less money on projects and reducing the use of contractors
The group will shed 6 per cent of its 30,000 global staff, more than half of whom are based in Britain.
Tulloch also said he was splitting the management of Aviva’s UK life and general insurance divisions.
Both already have leading market positions but face growing competition from rivals which have specialised.
It reverses a decision taken in 2017 under former boss Mark Wilson, who was ousted over concerns about the group’s strategy, and analysts said it could pave the way for general insurance to be sold.
Tulloch said this was ‘the first step in our plan to make Aviva simpler, more competitive and more commercial’.
He said: ‘Reducing costs is essential to remain competitive and this means tough decisions and job losses which I do not take lightly.’
The 50-year-old, who could earn up to £6million this year, has worked at Aviva for 26 years and previously ran its international operations.
Wilson oversaw several mis-steps and infuriated investors by taking a job as a non-executive director at US investment firm Blackrock, sparking fears over a conflict of interest.
Paul De’Ath, an analyst at Shore Capital, said Tulloch’s proposals were likely to boost future profits.
However, it was not enough for the broker to upgrade its rating of ‘hold’.
Union Unite said the job cuts proposed would be ‘met with disbelief across the company’.
100 jobs axed at TSB
TSB is expected to cull more than 100 jobs after its IT disaster last year.
The cuts were originally planned after the High Street bank switched from a computer system run by previous owner Lloyds to one run by its current Spanish parent Sabadell.
But a meltdown in April 2018 when the switch took place locked millions of customers out of their accounts, prompting TSB to delay the shake-up. Union, Accord, said the job cuts affected mainly back-office roles.
A TSB spokesman said: ‘We will work closely with any partners who might be impacted by any changes.’