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04/09/2003
Royal & Sun Alliance to cut 1,000 jobs
Troubled insurer Royal & Sun Alliance is to axe a further 1,000 jobs as part of an “outsourcing” operation to trim back on running costs.
The company stated that the cuts followed on as part of a strategic review to “drive up” profits and has announced a rights issue in a bid to bolster its fragile position.
Where the axe will fall was not detailed in the company’s report - released today - but the focus of the review will be on the UK, Scandanavian and Canadian operations.
However, the report mooted a savings target which has increased to £270 million, a move that is expected to see at least 1,000 jobs go in the UK operation as part of the rationalisation. Jobs are certain to be lost at the company’s Horsham and Liverpool offices, as a programme of office closures continues to bite in the UK.
Last year RSA axed 1,200 posts as part of a cost cutting exercise.
Sun & Alliance Chief Executive Andrew Haste said: “In November 2002, we targeted around £95m of annualised expense savings in the UK and had achieved around £38m of that by the half year.
“We said that we aimed to halve the number of premises the UK business occupies. This programme is well on track with 40 of the 93 premises we occupied at that time now vacated with further premises closures expected. We also outlined plans to reduce staff numbers in the UK by around 4,800 within 18 to 24 months. This is expected to be delivered, ahead of plan, by the end of 2003.
“As part of the increased expense savings target we are now aiming for an extra £105m out of the UK substantially by the end of 2006 bringing the total annualised target to £200m.
The news of the expanded programme of cutbacks came as the company announced half-year profits had risen by 17% to £351 million, up from £301 million in the corresponding period last year.
Also announced today was the resignation of Royal & Sun Alliance's Group Finance Director Julian Hance.
It is understod that Mr Hance, who was with the company for five years and has overseen the rights issue and the implementation of the operational review, will get a golden handshake in excess of £1 million.
(SP)
The company stated that the cuts followed on as part of a strategic review to “drive up” profits and has announced a rights issue in a bid to bolster its fragile position.
Where the axe will fall was not detailed in the company’s report - released today - but the focus of the review will be on the UK, Scandanavian and Canadian operations.
However, the report mooted a savings target which has increased to £270 million, a move that is expected to see at least 1,000 jobs go in the UK operation as part of the rationalisation. Jobs are certain to be lost at the company’s Horsham and Liverpool offices, as a programme of office closures continues to bite in the UK.
Last year RSA axed 1,200 posts as part of a cost cutting exercise.
Sun & Alliance Chief Executive Andrew Haste said: “In November 2002, we targeted around £95m of annualised expense savings in the UK and had achieved around £38m of that by the half year.
“We said that we aimed to halve the number of premises the UK business occupies. This programme is well on track with 40 of the 93 premises we occupied at that time now vacated with further premises closures expected. We also outlined plans to reduce staff numbers in the UK by around 4,800 within 18 to 24 months. This is expected to be delivered, ahead of plan, by the end of 2003.
“As part of the increased expense savings target we are now aiming for an extra £105m out of the UK substantially by the end of 2006 bringing the total annualised target to £200m.
The news of the expanded programme of cutbacks came as the company announced half-year profits had risen by 17% to £351 million, up from £301 million in the corresponding period last year.
Also announced today was the resignation of Royal & Sun Alliance's Group Finance Director Julian Hance.
It is understod that Mr Hance, who was with the company for five years and has overseen the rights issue and the implementation of the operational review, will get a golden handshake in excess of £1 million.
(SP)
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