Aviva could cut 1,500 jobs following Friends Life takeover

19th Jan 2015 16:11

Insurance company Aviva said it could cut 1,500 jobs following its £5.93bn planned takeover of Friends Life.The British firm said the job cuts, which would amount to almost 5% of the two companies' 31,500 combined workforce, could be implemented by the end of 2017."We appreciate that this news may be disconcerting for employees and we would look to ensure that any redundancies are kept to a minimum wherever possible, by using vacancies and natural turnover," an Aviva spokesman said on Monday."At this stage, no specific teams, roles or locations have been identified, as the proposed transaction has not completed."In 2014, Aviva announced that the takeover of Friends Life would allow it to save £225m per year by the end of 2017, though industry changes have shaken up the pension and insurance sectors, with annuity sales suffering a 50% drop.Aviva shareholders can vote on the proposed deal on 26 March and the Friends Life shares, which are valued at 394p in the deal against a trading price of 386p on Monday, will delist by 13 April if the deal receives the green light.Most analysts have a 'buy' rating on Aviva stock but some believe Friend Life's London office could be put at risk from the merger.At 16:29 on Monday, Aviva shares were up 0.79% to 510.50, while Friends Life shares were up 1.26% to 386.30.