Aviva plans to cut 2,000 jobs and reduce redundancy pay

The move is aimed to cut costs by £400m overall.

10:07 20 April 2013

2,000 people who are currently working for Aviva will lose their jobs within the next six months and will receive reduced payouts. From four week’s wage for every year of service, it will be reduced to two weeks and will be capped at 78 weeks.

New chief executive Mark Wilson, who aim to cut costs by £400m overall, said: "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.

Unions were obviously not happy about the announcement. They called the plans to cut jobs a “callous and disgraceful act.” Unite's national officer, Dominic Hook, told The Independent: "Once again, finance staff are being forced to pay the price for boardroom failure. Aviva has also announced plans to slash redundancy pay, with longer-serving staff losing more than a quarter of their entitlement."

The company isn’t performing really well. It lost £3bn in the last year mainly because of disappointing sales of its struggling US business. Because of this, the company decided to suspend executive bonuses for the year and to cut final dividends by 27per cent. Share prices also when down at 294.1p. It used to be well over 600p in 2008.