Aviva, one of the largest employers in Perth, expects to make job cuts of between 5% and 7% of its workforce.
The insurance firm employs around 1,100 at its offices at Pitheavlis in Perth. 7% of this total equates to 77 jobs.
The plans to reduce the headcount follow an agreement to acquire rival insurer Direct Line for £3.7 billion.
It said up to 2,300 job cuts could be made as the companies aim for at least £125m a year in cost savings.
In a stock market announcement to investors, the companies highlighted the cost efficiencies that would be made with a combined business.
It said: “The cost synergies from the acquisition are expected to be achieved through a reduction in overlapping roles across the combined insurance operations… as well as rationalisation of supporting teams and the reduction of overlapping roles in a number of shared service, head office and senior management functions.”
Future office requirements
It said, to achieve the £125m in cost savings, it expects to spend around £250m in “one-off integration costs”.
More than 80% of the savings will be made via a reduced headcount in the combined group.
It will also look to simplify the combined group’s office footprint.
The announcement adds: “Where there is geographic overlap, Aviva intends, where feasible, to consolidate the existing sites.
“In these cases, the aim would be to relocate staff to nearby locations of the combined group.”
In Scotland, as well as the Aviva offices in Perth, Direct Line and Aviva both have offices in Glasgow.
What does future hold for Perth Aviva staff?
The companies said they planned to cut 5-7% of the combined group’s employee base.
Aviva employed 23,000 people at its last annual report, while Direct Line Group employed 10,100.
The reduction in staff numbers of between 1,600 and 2,300 jobs will take place over the next three years.
However, Aviva expects the reduction in staff will be mitigated by “natural attrition”. It said it turns over around 1,300 staff annually.
It will also seek to redeploy employees where possible, noting it currently has 800 vacancies in the UK. There are currently 26 vacancies advertised for Aviva in Perth.
Aviva adds: “Any workforce changes would be subject to comprehensive planning and any required information and consultation with any affected employees and/or their representatives in accordance with applicable law.”
Scottish Conservative MSP Murdo Fraser said he was “very concerned” at the plans.
He said: “Aviva is one of the biggest private sector employers in Perth, with around 1,100 staff at its Pitheavlis site, so it’s important to know what the future holds for many of its staff who work there.
“I will be asking Aviva for clarification of these issues as soon as possible.”
First Minister John Swinney recently attended the opening of a 77-metre wind turbine at Aviva’s Perth offices.
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