Aviva could axe 1,500 jobs in Friends Life merger

In a circular distributed to shareholders, Aviva said the cuts would be part of a £225m savings plan and would see up to 1,500 jobs cut from a total of 31,500, however no specific teams, roles or locations have yet been revealed.

A spokesperson said:

"Aviva is looking to achieve cost synergies in those areas where it identifies there to be duplication, and to take opportunities to leverage the additional scale of becoming an enlarged group.

“This acquisition is financially and strategically compelling. It will increase our cash flows, reduce our leverage and support continued growth in our dividend. It also secures our leadership position in our home market and gives greater flexibility to drive growth in other parts of the Aviva group.

“As a result of this transaction, Aviva expects to deliver approximately £225m of annual savings by the end of 2017. This may result in a reduction of approximately 1,500 roles from across the enlarged Aviva group of approximately 31,500 people. We appreciate that this news may be disconcerting for employees and we would look to ensure that any redundancies are kept to a minimum wherever possible, by using vacancies and natural turnover, for example."

The £5.6bn merger would create the UK's "leading insurance and savings business in the UK" and will extend Aviva's customer base from 11 million to 16 million.

Aviva chief executive Mark Wilson said:
 
"It is one of those rare transactions where the two organisations fit with surgical precision, building on each other's strengths and addressing the challenges."

He added that as a result of the deal, the two insurers’ customers would now have access to a wider range of retirement income products, with the companies looking at developing more deals ready for the pension reforms in April.