Axa UK will cut 350 jobs as part of a strategic review of its life and pensions business. The move was condemned by the Unite union.
Nicolas Moreau, The insurer’s chief executive, said this was necessary to emerge the company from the recession.
Axa has raised its cost-savings target from £80m to £150m over the next three years in the UK (essentially life operations).
This plan represents a 10% reduction in staff at Axa Life, with most of the job losses taking place this year and next.
David Kennedy, Unite regional officer, said: “Unite is obviously extremely concerned about the potential impact of this on our members. In these difficult financial times, this announcement will only serve to cause them more anxiety.
“We understand that Axa Life is concerned about its cost base and level of profitability; however, this must not be used as an excuse for the short-term slashing of jobs. We will scrutinise and robustly challenge these plans as appropriate and will expect Axa Life to make every effort to avoid compulsory redundancies.”
The news came as Axa reported a 2% rise in underlying earnings to £186m in the UK and Ireland for the first half of the year. The figures were flattered by a one-off profit of £106m derived from the restructuring of a portfolio of annuity liabilities in the life and savings division.
Life and savings revenues fell 18% to £441m, while the wealth management business saw a 37% drop to £208m. Globally, Axa reported a 26% fall in first-half earnings to €2.1bn (£1.8bn).
“We have made considerable progress in the last six months,” said Moreau. “The insurance business’s focus on driving profitability is starting to show some positive signs; in healthcare the international business is now performing strongly and the life and savings businesses continue to execute successfully their strategy while reviewing their operations to reduce their cost base significantly, which I acknowledge also involves making difficult decisions that impact on employees.”
Unite said it was in the early stages of consultation with Axa about the job cuts and was awaiting full details.
Axa’s life business employs about 3,500 people in Bristol, Basingstoke and Coventry.