WORKERS at Norwich Union in York have started leaving the company as up to 500 job losses – announced by the insurance giant last summer – begin to bite.

The company has revealed that 38 staff had left its Monks Cross offices by the end of December.

A spokeswoman today said some of them had taken redundancy, but she was unable to say how many. She said others had retired or found new jobs elsewhere.

Another 50 had been redeployed and were now working in other departments across the city.

She said that more staff would leave and others would be redeployed during 2009, although she could not say when or how. However, she stressed that the company would continue attempting to keep redundancies to a minimum.

Norwich Union announced last July that it was outsourcing two key departments based at Monks Cross, where 750 staff worked, leading to the loss of up to 500 jobs.

It said it was entering a strategic partnership with the Scottish Friendly group, under which back office administration for its Lifetime Wrap department would be carried out in Scotland.

It was also outsourcing the administration of its collective investments department to International Financial Data Services (IFDS), based in Basildon, Essex, a move which would be phased in and which was due to be completed towards the end of this year.

About 300 York people worked in Lifetime Wrap – an IT system which allowed customers to check their Norwich Union products online – with another 200 working in collective investments.

The changes formed part of an overall strategy to simplify operations, reduce costs and focus on new opportunities for growth.

The company said the outsourcing of collective investments would significantly reduce operating costs, provide greater flexibility and make it simpler to quickly launch new products.

At that time, Mark Hodges, chief executive of Norwich Union Life, said it was too early to give an indication of the likely number of redundancies, but everything possible would be done to minimise the impact. The spokeswoman said today that all the staff departures so far had involved the Lifetime Wrap department.

Andy Case, national secretary of the Unite union, which represents many of the affected staff, said today: “The numbers leaving and being redeployed is not a bad mix, compared with what is happening in other parts of the financial services sector. It does seem they are making efforts to avoid compulsory redundancy. It’s good to see they are using redeployment and natural wastage where they can.”