Hundreds of workers in Sheffield face uncertainty about their jobs as major city employer Aviva prepares a multi-billion pound merger with pensions firm Friends Life.
The insurance company is one of Sheffield’s biggest employers, with around 1,300 workers based at its offices on Pear Street, off Ecclesall Road.
The firm, which has 12,000 staff across the UK, has admitted there are likely to be job cuts as a result of the deal but say it is ‘too early’ to say how many workers will be affected. Aviva has refused to confirm speculation that as many as 2,000 workers could be made redundant as a result of the merger.
It is hoping to generate annual savings of £225 million by the end of 2017 through the deal.
The £5.2 billion deal is due to go ahead in the spring, subject to the approval of shareholders.
Friends Life currently has 3,500 staff, mainly based in London, Manchester, Bristol and Salisbury, while Aviva’s other offices are in York, Norwich and Glasgow.
Mark Wilson, chief executive of Aviva, said the deal will give his company an extra five million customers.
He added: “When you do an integration, of course there may be some job losses, but there are also a lot of areas that aren’t related to jobs where you can get some of this cost out.”
The combined company, which will retain the name Aviva, will serve 16 million customers, equivalent to one in four households in the UK.
It will become the UK’s leading insurance, savings and asset management business by number of customers.
Mr Wilson said: “It is one of those rare transactions where the two organisations fit with surgical precision, building on each other’s strengths and addressing the challenges.”
The company said customers in the combined group would benefit from being part of a stronger and more diversified business.
But concerns have been raised about the planned deal by analysts.
Shore Capital analyst Eamonn Flanagan said he was concerned the deal will increase Aviva’s exposure to a UK market that is already the subject of uncertainty due to changes in the Budget on pensions annuity rules.
Mr Flanagan said: “We remain puzzled why Aviva felt the need to do it now.”