Insurance firm braced for job cuts

WILLIS staff in Ipswich were on tenterhooks today after the global insurance broker announced jobs are to go.Around 500 posts are to be axed by the New York-listed company following a review of operating costs designed to maintain competitiveness.

WILLIS staff in Ipswich were on tenterhooks today after the global insurance broker announced jobs are to go.

Around 500 posts are to be axed by the New York-listed company following a review of operating costs designed to maintain competitiveness.

Today's news contrasts sharply with last October when it was announced Willis in Ipswich was is in the process of employing 40 new staff for its global operations activities.

The company claimed its Ipswich operations were in a strong position to grow.

At the time, Nick Jones of Willis said: "The Ipswich team is absolutely integral to the group and the group is doing extremely well. Ipswich is one of three centres for what we call our Global Operations, which include claims, accounting and other after sales services.

"The other two are in Nashville and in Mumbai, India, and these should be seen as an integral service throughout the group on a worldwide basis to deliver best in class servicing."

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But now a gloomier overall picture has arisen.

Reporting its results for the first quarter of 2005, Willis said: "The company continues to review its expenses base in light of an evolving business model for insurance brokerage.

"As of March 31, 2005, approximately 500 positions were identified and are being eliminated."

Willis has a worldwide workforce of more than 14,500, located at 300 offices in 100 different countries. These include 14 locations in the UK, with the Ipswich offices understood to have a headcount of around 750 at present.

Willis spokesman Dan Prince said the job cuts applied across the board and were not restricted to particular countries or businesses.

No figures could be given for individual locations but, across the group as a whole, the cuts were equivalent to about four per cent of the workforce, he added.

Willis said that severance costs and related expenses resulting from the job cuts would be in the region of £14.7million.

This was one of several factors cited by the company as being behind a fall in net income for the first quarter to around £37.8m. During the same period last year the net income was just over double that amount.

The figure was also hit by changes in the structure of commission fees, the creation of reimbursement funds and associated legal costs following investigation into commissions, and increased provision against legal proceedings.

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