Insurer Aviva will axe 2,000 jobs, or around 6.4 per cent of its workforce, in order to move towards making £400m of cost savings. Our insurance specialist James Waterson:
Aviva are still dealing with the legacy of Andrew Moss's disastrous reign as chief executive from 2007 to 2012. During that time the share price plummeted and the company stagnated during a bodged attempt to turn the business into a global player.
Faced with a company in decline chairman John McFarlane took hands-on control last summer and instituted a radical turnaround plan that has seen Aviva retreat from the US and other holdings across Asia and Europe in the hope that the a slimmed-down company can ride out the storm.
But newly-arrived chief executive Mark Wilson still has a lot of heavy lifting to do if he is to convince the City that this is not a deeply troubled company. He has already slashed jobs and cut the dividend by 44 per cent, while Aviva shareholders look wistfully at the performance of rival UK insurers such as Prudential.
Chief executive Mark Wilson commented on the announcement:
I know this is difficult news for our employees but these changes are essential if we are to remain competitive.
Aviva needs to become a more efficient and agile organisation to unlock its potential. We must take tough decisions on costs to provide our customers with great value products and ensure our future success. I am determined that Aviva gets through this phase of our business transformation as quickly as possible.