Insurance giant Norwich Union is to axe 700 jobs as part of its continuing plans to reduce costs.

Most of the job losses are expected to be compulsory and will hit sites in Norwich, York, Bristol, Stevenage and Croydon.

The company is also reducing the number of contract posts by 250.

Norwich Union, which is owned by Aviva and employs about 1,000 people in Worthing, said the jobs would go from restructuring its life business services division.

The company said: "While difficult for the staff concerned, the restructure is necessary to further reduce costs and increase flexibility in response to changing market conditions."

The restructuring will be completed by the end of 2005 and Norwich Union said the work undertaken by staff affected by the cuts would be outsourced to other companies.

A company spokesman said it had set aside £1 million to give career advice and support to affected staff.

Chief executive Gary Withers said: "We will do everything we can to help and support staff during these challenging times."

Amicus, which represents Norwich Union workers, said staff would be "devastated" by the announcement.

The union said it would meet senior management in the next few days to discuss the job cuts and oppose compulsory redundancies.

National officer Dave Fleming said the 700 job losses amounted to half the total employed in the business services division.

The move comes four months after Norwich Union said it would close its insurance intermediary Hill House Hammond, with the loss of at least 1,200 jobs, including dozens across Sussex.

During 2003, Norwich Union owner Aviva identified annual cost savings of about £250 million, including plans to cut 2,350 jobs and export work to India.

Thursday June 10, 2004