Aviva warns of 1,500 job cuts after merger with Friends Life

Terry Murden, Editor | January 19, 2015

Insurance company Aviva, which employs 2,000 people in Scotland, says as many as 1,500 jobs may go as a result of its merger with Friends Life.

Britain’s biggest insurer spelled out the prospect of widespread redundancies in a circular to be distributed to shareholders who will vote on the £5.6 billion deal on 26 March.

The job cuts are likely by the end of 2017 and are part of the insurer’s plans to generate £225m in annual cost savings in the enlarged group which will have 31,500 employees.

“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,” an Aviva spokesperson said.

Aviva said it was unable to identify roles or locations for the job cuts.

The takeover will create the UK’s largest insurance, savings and asset management company and is the first by Aviva chief executive Mark Wilson who was brought in two years ago to revive its flagging fortunes. Friends Life emerged from Friends Provident and the merger was prompted by reforms in the pensions industry which pose a threat to the sale of annuities.