DUTCH insurance group Aegon warned today of job losses among its 3,700 UK life and pensions employees as part of a major overhaul of its operations.
The group aims to cut UK costs by 25% by the end of next year under a plan to refocus the business and pull out of unprofitable areas.
Aegon said it was too early to say how this would impact staff, but it plans to give more details at the end of September.
The group’s UK life and pensions arm will take the brunt of the cost-cutting.
This division employs around 2,400 staff in Edinburgh, 670 at Lytham St Annes, Lancashire, and 630 in sales roles across the UK.
Aegon chairman Alexander Wynaendts said plans to trim annual UK costs by #80 million would have a ``significant'' impact on its British workforce.
"We’re not at this point sharing much more detail, but it is clear it will have a significant impact on our UK business and also an impact on our employment," he said.
He confirmed the company had looked at a possible sale of the UK business, but decided it would not offer the best value for shareholders in the current market.
Recent speculation has suggested the group is seeking to ready its British business for sale, but he said the restructure would see it make a "long-term commitment to the UK".
Aegon plans to withdraw its UK business from bulk annuities - bought by firms that run final salary pension schemes to provide an income for their workers who retire.
It will instead focus solely on the "at retirement" market and workplace savings, including the popular DIY-style self-invested personal pensions (SIPPs).
The group stressed its cost-cutting review would not have an impact on Aegon Ireland, while the UK asset management business and distribution arms, Origen and Positive Solutions, were also not under the scope of the review.
Aegon's UK restructuring comes as part of wider changes announced today to shore up the business, which has struggled since the financial crisis struck.
It was forced to take State aid from the Dutch government at the height of the woes and still owes 2 billion euros (£1.7 billion).
The group said it remained a "priority" to repay the support money.
Aegon has already taken action in the past two years, including selling off life insurance operations in Taiwan, but will now offload other under-performing businesses worldwide, such as the life re-insurance division.
The UK in particular has been a difficult market for Aegon in recent years, with life and savings business hit by the credit crunch and recession.
Britain’s insurance market is also widely viewed as having little growth potential, making insurers keen to exit it and instead enter the rapidly expanding Asian markets.
It emerged last week that insurance giant Axa was considering selling its UK life and pensions business to Resolution for £2.75 billion.
Aegon’s UK business was founded in 1994 when the Dutch group bought Scottish Equitable.
The business largely deals with corporate and individual pensions, and it has a 10% market share with around two million policyholders.