British insurer Aviva Plc will cut as many as 2,000 jobs worldwide in the latest cost-cutting drive aimed at revitalizing its flagging fortunes, the company confirmed on Thursday.
Chief Executive Mark Wilson told staff the cuts would equate to around 6 percent of Aviva Group’s global workforce over the next six months and reiterated a commitment to deliver more than £400 million ($609 million) in cost savings by year-end.
“I know this is difficult news for our employees but these changes are essential if we are to remain competitive,” Wilson said in a statement emailed to Reuters.
“I am determined that Aviva gets through this phase of our business transformation as quickly as possible,” he added.
Aviva, which employs around 31,200 people, has launched a root-and-branch shake-up after years of spiraling costs, disappointing share price performance and an investor revolt that led to the departure of former chief executive Andrew Moss in 2012.
Chairman John McFarlane sought to appease angry investors with a strategic review last July, which called for the sale or closure of more than a dozen underperforming and non-core business units.
Aviva is also overhauling its redundancy policy for all employees on UK contracts. From December, staff will only receive two weeks’ pay for each year of service, rather than a current four weeks’ pay. Pay will also be capped at 78 weeks.
Wilson, who took the helm in January, slashed the 2012 dividend by more than a quarter in March to repay debt, as the company reported a 15 percent drop in operating profit to 2.13 billion pounds, broadly in line with forecasts.
The company has made annualized cost savings of £275 million [$421 million] so far. Its shares were trading 0.5 percent higher at 296.3 pence [$4.53] by 11.52 GMT, broadly in line with London’s top blue chip companies.
By Anjuli Davies and Sinead Cruise
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