UK: Union blames ‘boardroom failure’ for jobs cuts at Aviva

STAFF at Aviva whose jobs have been placed at risk in a �400million cost-cutting drive are paying “the price of boardroom failure”, a union said today.

The Norwich-based insurance group, which employs 18,500 people in the UK, has warned that up to 800 jobs could be lost under a restructuring being overseen by new chairman John McFarlane.

He took the helm earlier this year after chief executive Andrew Moss stepped down following a shareholder revolt over pay and share price performance.

But David Fleming, national officer for the Unite union, said: “Our members face being asked to pay the price of boardroom failure and Unite is dismayed that what started out as a shareholders’ revolt on executive pay will result in a jobs cull. This is totally unacceptable.”

The cost-cutting drive will focus on removing layers of management, while Aviva has said it could guarantee only 70% of the jobs in the UK life and pensions department.

Aviva said up to 800 UK jobs were at risk but its record of keeping role reductions to a minimum meant the figure was likely to be lower.

Mr McFarlane, who has already begun the process of jettisoning non-core businesses, hopes to save �400 million by 2014 through simplifying the business.

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Mr Fleming urged Aviva to “come clean” about the extent of the cost-cutting programme in the UK.

He said: “What started out as an initiative to cut bureaucracy and duplication at senior and middle management levels under the banner of ‘Project Simplify’ has quietly turned into a major job cuts programme.”

Aviva recently announced a 10% drop in half-year operating profits to �935 million, reflecting restructuring costs and lower returns from its life and pensions operations in the beleaguered eurozone.