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Anger over Norwich Union jobs 'betrayal'

PUBLISHED: 07:00 03 April 2009 | UPDATED: 09:31 11 May 2010

Thousands of Norwich Union workers reacted with anger and disbelief at the company's "absolute betrayal" last night after it was announced almost 500 jobs will go in Norfolk - just three weeks after staff were assured they were safe by Aviva's general insurance chief executive, Igar Mayer.

Thousands of Norwich Union workers reacted with anger and disbelief at the company's “absolute betrayal” last night after it was announced almost 500 jobs will go in Norfolk - just three weeks after staff were assured they were safe.

Company director Igal Mayer told the EDP last month that the only job losses planned had already been announced and that Norwich was likely to see a modest increase in staff this year - a ray of hope in the economic downturn.

But yesterday the UK's largest insurer, which is changing its name to Aviva, announced 1,690 permanent and contractors jobs were likely to go by the end of the year, with York and Norwich bearing the brunt of the losses.

The move has been described as a “significant loss” but the company reiterated its commitment to Norwich and said negotiations were at an early stage and would hopefully result in a reduction in the number of cuts to about 800 permanent employees across the country.

Ian Gibson, Norwich North MP, said: “I think this is an absolute betrayal. Three weeks ago they promised there would not be any job losses and now this. Footwear has gone from Norwich, engineering has almost gone and now the financial services are on the slide.”

In Norfolk, 226 permanent staff and 254 contractors' jobs are at risk in the Norwich Union Life side of operations and in York 349 permanent and 222 contractors with 200 elsewhere in the country.

Last month, in an interview with the EDP, Mr Mayer, chief executive of Aviva's general insurance arm, said they would not announce any “new job losses”.

He said: “There's nothing in the way of new news. You would expect me to say that but why would I cut staff in Norwich? It is such a great hub of employment for us.”

The news came as the re-insurance firm Swiss Re also announced that it will shed about 1,000 jobs worldwide this year.

But the 600-plus Swiss Re staff in Norwich - who administer three million life and pension policies for Aviva - may escape the worst of the cuts.

Defending Mr Mayer's assurances, David Ross, head of media relations, said: “The comment was not made with any sense of misleading staff or the media. It was about our commitment to Norwich and although there will be changes along the way, in terms of presence in Norwich we stand by Igal's comment. We are not about to embark on any significant changes in the role Norwich plays.”

Mr Ross said about 6,500 people are employed by Norwich Union in Norfolk and by the end of the year he did not expect that to drop significantly because the impact of this latest announcement would be minimised by natural turnover and redeployment, while a number of vacancies have been closed.

Most of the job cuts are in “business change” and IT, with the rest spread across other areas of the company.

Mark Hodges, chief executive at Norwich Union Life, said: “Our strategy over the last three years has seen us transform and simplify our business, leaving us well placed to face the challenges ahead.

“We have made significant progress in improving our operational efficiency and are also nearing completion on a series of major change projects. Unfortunately, this means that a reduction in the number of roles in the business is inevitable.

“Making decisions that affect our people is always difficult and we are fully committed to doing everything we possibly can to minimise the number of compulsory redundancies. Our priority now is to work with everyone affected by the announcement and to support them however we can.”

Norwich South MP Charles Clarke said he was reassured that the company had reiterated its commitment to Norwich but that it was disappointing for staff.

“Norwich Union Life has been preparing this for some time and I understand it is not a response to the immediate economic situation but creating more efficiency in the business,” he said.

Chris Starkie, chief executive of Shaping Norfolk's Future, agreed that the redundancies were part of a long term plan.

He said: “It's obviously bad news for the Norwich economy that a cornerstone employer is making such significant redundancies and clearly a sad day for Norwich Union staff.

“However, it's important to recognise that it is not a knee-jerk reaction to the economic downturn unlike many other employers but part of a longer term plan to ensure that Norwich Union remains an important part of Norwich's economic future for years to come.”

But Andy Case, from the trade union Unite, which represents staff, said: “The first we knew of it was when our reps were briefed at 8am. Clearly we are very angry and upset, as are our members.

“Norwich Union is a big employer and perceived to be performing relatively well given the current circumstances. They have just paid out a full premium to shareholders and they are spending a lot on television advertising.

“Although they have said it is not related to the recession, it is beside the point. At the end of the day we are in a recession. Jobs are at a premium and this will be a significant loss not just to Norwich but the UK economy.”

While Simon Wright, Liberal Democrat parliamentary spokesman for Norwich South, added: “They've invested millions of pounds in developing and refurbishing offices in Norwich in recent times, and given numerous assurances over jobs in the city. These cuts seem to be completely out of the blue and at odds with previous statements.”

Labour MEP Richard Howitt called on the company's management to minimise the impact of redundancies in their operation in the city.

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