Aviva is set to cut 1,800 jobs over the next three years in a bid to help save £300m per year.
The bombshell announcement means the UK insurance giant stands to lose six per cent of its 30,000 workforce under new chief executive Maurice Tulloch.
Tulloch kickstarted his reign in March by saying the UK insurer has “much further to go” to up returns to shareholders.
Tulloch’s cost saving initiative aims to save £300m per year by 2022, as Aviva tries to cut its debt pile by £1.5bn.
It hopes to hit its workforce reduction target through natural turnover over the next three years while keeping redundancies to a minimum.
“Aviva will look to ensure that redundancies are kept to a minimum wherever possible, for example through natural turnover,” the company said in a statement today.
Aviva did not say which markets the job losses would come from.
The insurance giant also hopes to lower central costs by spending less on consultants, reducing investment in new projects and other measures.
Tulloch said he has highlighted “clear opportunities” to improve.
“Reducing Aviva’s costs is essential to remain competitive and this means tough decisions and job losses which I do not take lightly,” he said.
“We will do all we can to minimise redundancies and support our people through this.
“I am also determined to crack Aviva’s complexity, an issue which has held back our performance for too long.”
Tulloch called Aviva’s dividend “paramount” and vowed to grow capital and cashflow to support it.
When he joined in March Tulloch vowed to deliver better returns to shareholders.
Former boss Mark Wilson lost his job over Aviva’s flagging share price.
Today Aviva’s share price rose 1.5 per cent to 416.6p.
Aviva today confirmed former chief risk officer Angela Darlington’s appointment as interim chief executive of the UK life insurance business.
Tulloch also moved Colm Holmes to the role of chief executive of general insurance, which includes the firm’s digital arm.
Aviva chief financial officer Tom Stoddard yesterday announced he would step down at the end of this month with the board’s agreement.
Aviva said year-to-date trading is broadly flat with 2018. Weaker performance in savings and asset management was partly offset by growth in Europe and Asia.
Meanwhile Aviva reported progress on its business turnaround in Canada.