Aviva to cut 4,000 jobs, move 1,500 to India

British insurance company Aviva plans to reduce its U.K. staff by 4,000 by 2008, and move 1,500 IT and BPO (business process outsourcing) jobs to India in a bid to save £250 million ($468.6 million) annually.

The company is moving 1,000 BPO jobs to its Indian subsidiary Aviva Global Services in Pune and another 500 IT jobs to Indian outsourcers Wipro Ltd. and Tata Consultancy Services (TCS), a spokeswoman for Aviva Global Services said.

Aviva's U.K. business Norwich Union plans to save £250 million yearly starting in 2008, and the moves will initially cost it £250 million by the end of 2007. The savings will come primarily from the company operating more efficiently and reducing duplication in marketing, human resources, finance, and information technology, as well as applying a single approach to procurement and supplier management, the company said.

Aviva currently has about 6,000 BPO employees in India and Sri Lanka, including staff of Aviva Global Services and Indian BPO companies working for Aviva. The company also has 1,500 IT staff working on its projects at Wipro and TCS, the spokeswoman said.

The addition to BPO staff is part of a plan announced by Aviva in 2004 to have 7,800 BPO jobs in India and Sri Lanka by the end of next year, the spokeswoman said. The number of IT staff working on Aviva projects with outsourcers will also go up to 2,000 during the same period, she added.

Aviva announced last month that it was moving over 5,000 BPO staff from third-party providers to its Indian subsidiary. Three Indian BPO companies set up facilities for Aviva on condition that the staff doing Aviva work and the facilities would be moved to Aviva at a later date. Aviva will continue to outsource to third-party BPO and IT services providers even after the transfer of 5,000 BPO staff is complete by January 2008, the spokeswoman said.