Ipswich: Shock as Legal & General decides to close office with loss of 140 jobs
18:19 02 September 2014
Sarah Lucy brown
More than 140 jobs are set to be lost in Ipswich after a shock announcement yesterday that insurance giant Legal & General (L&G) is set to close its office in the town.
Staff from the Friars Bridge Road office were said to be shocked, tearful and angry after they were called to a morning briefing at the town’s Novotel hotel to be told the news.
The company said the office closure was part of a plan to combine its customer services operations at one site in Birmingham.
It added that while 140 jobs would go at Ipswich, where the company has had offices since 1990, 120 jobs would be created at its offices in Birmingham and Hove.
Union Unite described the announcement as “a serious blow to the Suffolk economy” and said it was not ruling out industrial action.
Unite regional officer Ian Methven said: “This is devastating news for the staff and their families, and also a serious blow to the wider Suffolk economy.
“This follows substantial job losses across the country by the insurance giant in the last year and today’s announcement is a kick in the teeth to the loyal and experienced workforce in Ipswich.
“We will be giving our members maximum support in the weeks and month ahead.”
The union called on senior management to reverse its decision.
“Unite firmly believes that Legal & General’s current strategy of reducing jobs to cut costs is damaging to both the business and to its members (policy holders). It is a counter-productive policy,” it said.
“The Ipswich work, which is customer facing, will move to the Hove and Birmingham offices, but the workforce at these two sites won’t be increased to reflect the number of job losses.
“These jobs losses will affect customers across the whole of the country and not just in East Anglia.”
An L&G spokesperson said: “We are closing the Ipswich office down and that will be phased between now and May next year. There are about 140 jobs in Ipswich and those will be lost to the Ipswich area. We are moving approximately 120 of those to two other sites, the Birmingham office and the Hove site. We will obviously be offering relocation packages if staff want to move.”
He added: “We have also got Suffolk Life, A SIP pensions provider, which is owned by Legal & General, in Ipswich and if there are opportunities for people to transfer, we’ll look to transfer them from the Ipswich office.”
The rationale behind the closure was “very, very simple”, he said.
“We want to centralise our customer services operations into one office. Our general insurance will be dealt with in one office in one department in Birmingham.”
It was not a cost-cutting exercise, he stressed, as the company had only recently announced record half-year profits.
“It’s not a cost-cutting exercise. We just believe the business will be more efficient and will work better for our customers.”
An Ipswich staff member, who asked not to be named, condemned the move and said she believed the company was making a big mistake.
“Everybody is really angry because it was a total shock, because they have still been recruiting in the last few weeks and there were plans to recruit in October. Unite the union is fighting it. There might be some strike action. We are going to fight the closure, because we don’t think it’s the right thing to do,” she said.
The knowledge base at the Ipswich office, which had been in the town in different locations for many years, could not be equalled at the other offices, she said.
“Legal & General customers are going to be affected. We don’t just service Ipswich, we service the whole of the UK. We think it’s going to be quite detrimental to the brand. This decision has come from a spreadsheet, from someone with no idea what’s going on,” she said.
“The amount of long-serving staff, the loyalty at the Ipswich office, can’t be compared to Birmingham,” she added.
“They are offering us Birmingham and Hove. Who realistically would want to move to Birmingham or could afford to move to Hove?”
Staff were “really angry”, she added, and some had been in tears after the briefing.
“I want them to know what a big mistake they are making,” she said.
“They are doing very well. They made very good profits this year. There’s no need for what they are doing. Of course, I’m going to be bitter because I’m an employee losing my job, but I really think they are making a huge mistake. They have picked the wrong site to close. We are really loyal to that brand. A lot of people who work there, we love our jobs and it shows, and the way we are being treated we really do believe we are being slapped in the face by a company we have been loyal to.”
The briefing, which staff were summoned to by email yesterday, was a complete shock, she said.
“There are people there who have just got houses, got married, had babies. It’s devastating for people.”
The L&G spokesperson explained that in 2013, L&G restructured its insurance business, combining UK Retail Protection, General Insurance, Legal & General Netherlands and Legal & General Network.
“This was done to help us extend the range of products and services we provide to our expanding customer base,” he said.
“This reorganisation has led to us making some further changes to our various operations and activities in our customer service areas, which means that all household claims will move from our Ipswich office, to create one single claims operation based in Birmingham and all Ipswich customer service operations will move to our Hove customer service location, creating a dual household customer service operation with Birmingham.
“We are confident these changes will reduce complexity, help us to improve our overall efficiency and enhance customer experience.
“These operational changes and because the release for the Ipswich office ends in 2015, means the office will be closing after the changes have taken effect. To ensure a smooth transition the outlined changes will take place in a phased approach between now and end of May 2015.”
Legal & General, which dates back 178 years and started in London, employs about 9,000 staff and has about 10million customers. In the first half of 2014, it made £636million in operating profits. Suffolk Life in Ipswich employs 300 staff.