YORK was rocked today by news of 450 job losses at one of the city's biggest employers, Norwich Union.

The redundancies are part of a package of 4,000 losses across the UK, with 1,000 going to India and another 500 in IT being outsourced to "third party suppliers".

Norwich Union said that while it would seek to achieve as many redundancies as possible through volunteers, normal staff turnover, redeployment and avoiding filling vacancies, it expected about half to be compulsory.

The announcement is the third major jobs blow to hit York this year, with redundancies revealed by Nestl Rowntree in the spring and just over 100 jobs to go at British Sugar with the closure of its sugar beet factory next year.

Fastline, part of Jarvis, also said earlier this week that up to a dozen skilled engineers were to be axed at its works in York.

The news came as a massive shock to workers in the city, who had not been briefed by their managers.

An announcement was due to be made today but the story had been leaked overnight.

Today, Mark Hodges, of Norwich Union Life, said: "I am sorry that our employees heard this information on the news first.

"Unfortunately, some information leaked yesterday and under stock exchange rules it meant that we had to make our announcement earlier than planned.

"We have done our best to ensure that we fully brief our staff to inform them of these changes and the reasons behind it."

Mr Hodges said the cuts were necessary to remove duplication from their "dynamic" operation.

He said it still left about 3,000 jobs in York and that the company had no plans to quit its city centre headquarters, insisting York still had a bright future.

Norwich Union, the UK's largest insurer, said it was beginning a formal consultation process with staff representative bodies.

It said it had conducted a major review of its business to ensure it fully capitalised on changes in the way customers are buying insurance, and the greater use of and access to technology.

It also wanted to ensure it maximised the benefits from the closer integration of its life and general insurance businesses.

Executive chairman Patrick Snowball said the company needed to reshape and simplify operations to meet the challenges of the changing insurance marketplace.

"We have to ensure that Norwich Union remains a highly efficient and successful company in what is an increasingly competitive and dynamic environment," he said.

"Customers' buying habits are changing rapidly as technology becomes more accessible, demonstrated by the fact that 50 per cent of our new direct motor insurance policies are now bought online."

He said consumers and brokers were increasingly operating in a self-service world, "and we have to continue to respond to this.

"We recognise that tough decisions such as these are difficult for the people affected but they are absolutely necessary.

"We will look for every opportunity to redeploy staff in new roles and we will ensure those affected get specialist career advice."

Norwich is worst affected by the new, losing about 850 jobs, with Glasgow losing 250, Sheffield 250, and Cambridge, Perth, Newcastle and Eastleigh all shedding 200.

A further 150 will go at Stevenage and Bristol, 100 at Worthing and Belfast and 50 in Birmingham.

In addition, the 107 high street outlets of BSM are to close by the end of next year, as a result of changes in the way people are booking driving lessons.

In future, BSM will operate a centralised sales and service operation along with up to 70 instructor service centres and 50 field-based managers providing support to its 3,400 driving instructors.

Some of the work undertaken by the BSM centres will transfer to a new contact centre and the net reduction in roles as a result of these changes will be around 200.

In the future, BSM's products will be sold via the internet and a contact centre.


The company's full press release:

Following a review of its businesses, Norwich Union, the UK's largest insurer, is to implement a number of major changes by the end of 2007.

The implementation of the changes will result in a reduction of around 4,000 roles across the UK by the end of 2007, approximately half of which are anticipated to be through compulsory redundancies. Norwich Union will seek to minimise compulsory redundancies through normal staff turnover, redeployment, not filling vacancies and voluntary redundancy where appropriate. Following this announcement the company will begin the formal consultation process with the staff representative bodies.

Of the reductions, around 1,000 operational roles will be offshored to India in line with existing plans already announced, while around 500 IT roles will be outsourced to third party suppliers.

The review was undertaken to ensure that the company fully capitalises on the changes in the way customers are buying insurance, the greater use of and access to technology, and to ensure it maximises the benefits from the closer integration of the life and general insurance businesses.

Norwich Union executive chairman Patrick Snowball said the operational changes were necessary to reshape and simplify operations to meet the challenges of the changing insurance marketplace.

He said: "We have to ensure that Norwich Union remains a highly efficient and successful company in what is an increasingly competitive and dynamic environment. Customers buying habits are changing rapidly as technology becomes more accessible, demonstrated by the fact that 50% of our new direct motor insurance policies are now bought online. Consumers, IFAs and brokers are increasingly operating in a self-service world and we have to continue to respond to this."

"We recognise that tough decisions such as these are difficult for the people affected but they are absolutely necessary. We will look for every opportunity to redeploy staff in new roles and we will ensure those affected get specialist career advice."

The main locations affected by today's announcement are:

approximate role reductions

Norwich 850
York 450
Glasgow 250
Sheffield 250
Cambridge 200
Perth 200
Newcastle 200
Eastleigh 200
Stevenage 150
Bristol 150
Worthing 100
Belfast 100
Birmingham 50

In addition to the above locations, 700 of the total role reductions will be across approximately 40 other Norwich Union offices and 107 BSM high street outlets (see below). There will also be a reduction of around 150 home worker roles.

The company expects around half of the total role reductions will be through compulsory redundancies.

As a result of changes in the way people are booking driving lessons, the 107 high street outlets of BSM will close by December 2007.

In future, BSM will operate a centralised sales and service operation along with up to 70 instructor service centres and 50 field-based managers providing support to its 3,400 driving instructors.

Some of the work undertaken by the BSM centres will transfer to a new contact centre and the net reduction in roles as a result of these changes will be around 200. In the future, BSM's products will be sold via the internet and contact centre.