‘No compulsory job losses’ in R&SA’s latest cutbacks

Aug 9 2007 by Alistair Houghton, Liverpool Daily Post

LIVERPOOL-BASED insurer Royal & SunAlliance says it will avoid making compulsory redundancies as it cuts 700 jobs in a bid to save £70m a year.

The move, which should be completed by the middle of next year, will see 500 jobs cut in the UK, although R&SA says it is still too early to say from where the jobs will be shed.

R&SA says it aims to avoid compulsory redundancies and trade union Unite says it will show “zero tolerance” towards any redundancy plans.

The company yesterday announced its half-year results and said it expected the financial impact of floods in June and July to be about £120m.

Its share price soared yesterday morning as its operating profits of £403m comfortably beat City forecasts of £353m.

Liverpool is R&SA’s biggest base in the UK, employing just under 1,300 people. The company employs about 9,000 people in 20 offices across the UK.

R&SA spokesman John Sellors said: “As part of our half-year results announcement, we announced a cost-saving target of £70m, including £50m in the UK.

“That will include operational efficiencies, getting greater benefit from IT, procurement, and premises, plus a role reduction of around 500 roles in the UK.

“Until we sit down to negotiate with the unions, it’s too early to say what kind of roles they’ll be and where they’ll come from.

“We are not closing any offices and we’re not targeting any particular area.

“We have a good relationship with the union and we will work with them to minimise any compulsory redundancies.” David Fleming, Unite's national officer for the finance sector, said: “This is yet another unhappy addition to the many announcements of jobs cuts being made in the finance sector as a result of mergers, offshoring and restructuring.

“Unite is already in dialogue with R&SA over these cuts and we will maintain our position of zero tolerance if any attempt is made to make compulsory redundancies.”

The latest cost savings are in addition to the £130m of cuts announced by the company last year. That plan involved cutting 1,550 jobs by June, 2008, including around 1,000 positions in the UK.

alistairhoughton