150 jobs axed

The company announced today that work in its Life business services division will be transferred to IT outsourcing companies, operating globally in locations including India, Europe and America.

The move will result in about 700 job losses across the country, including 150 at sites across York.

Another 250 contract workers will also lose their jobs, although it is not known how many in York will be hit.

Norwich Union Life, which employs about 3,250 people in York, said the "difficult" restructure was necessary to reduce costs and increase flexibility in response to changing market conditions.

The company said it would try to find redeployment opportunities for staff. "However, unfortunately, the company expects the majority of the job losses will be compulsory."

Norwich Union had set aside £1 million to provide career advice and support for affected staff.

During 2003, Norwich Union owner Aviva identified annual cost savings of about £250 million, including plans to cut 2,350 jobs and "export" work to India.

Today's announcement comes only weeks after Kraft Foods revealed it intended closing Terry's chocolate factory and transferring production abroad, with the loss of more than 300 jobs.

Workers emerging from meetings at Norwich Union's central York offices, in Wellington Row, were tight-lipped but clearly unhappy at the announcement.

Union chiefs said workers were "devastated".

Private sector union Amicus said it would be meeting Norwich Union senior managers to "get a full picture of their business case for these cuts".

National secretary David Fleming said Amicus would "vigorously oppose" compulsory redundancies and off-shoring of jobs abroad.

Ryedale MP John Greenway, who chairs a Westminster all-party insurance committee, said the group had long been warning the Government about job cuts in the industry, which was in a "serious condition".

"The problem is that Government policies on savings and investments are so muddled that people are just not taking out policies or saving the money they were before," he said.

"We are going to see more of this unless the savings ethic is restored and people feel it's worth saving for their long-term futures."

But he stressed Norwich Union was probably best-placed of all life assurance companies to respond to any improved market.

York MP Hugh Bayley said redundant staff might be able to find work within about 100 IT companies now based in the city.

"Job losses are always bad news," he said. "The crucial thing is to find alternative jobs for those affected.

"I have asked Norwich Union to speak to Science City York about opportunities for any staff who are made redundant."

City of York Council leader Steve Galloway said the job losses were a matter of concern. "Norwich Union is such an important player in the city, providing good quality jobs and we want to do what we can to keep the insurance industry at the forefront of economic development strategies.

"The economic development department and the inward investment board will work with staff affected to try to find them alternative employment."

Tony Bennett, the council's assistant director of economic development, said the authority would look to see whether alternative jobs, perhaps in Science City, could accommodate those losing their jobs.

Andrew Lindsay, vice-president of York and North Yorkshire Chamber of Commerce, said the chamber regretted the job losses. He was confident staff would be able to find other work in the city.

"The software industry employs literally thousands of people in York and the surrounding area, and there is a huge amount of mobility."

Regrets, but staff must go

AS Norwich Union Life staff were being told the bad news today, chief executive Gary Withers revealed that York's 150 job losses were part of a new plan to farm out half the IT work.

He said that the cuts were necessary because of huge regulatory changes to the insurance industry which in a year had cost his organisation £150 million.

Contracting out was not necessarily cheaper per project, but it did give Norwich Union Life more flexibility to pinpoint needs, he said.

Mr Withers said he regretted that the majority of the job losses would be compulsory.

"The good news is that IT people have skills which are easily transferable to other areas and are reasonably in demand," he said.

He hoped to work with the City of York Council and the University of York to identify IT firms who might be interested in employing people. He had also set aside £1 million to give career advice and counselling.

"I am aware of the initiatives between the city council and the university to make York an IT base, and it means that the IT market is buoyant," he said.

Updated: 14:57 Wednesday, June 09, 2004