Standard Life axes 90 jobs in the Capital

STANDARD Life today shocked unions and workers by announcing plans to axe 360 members of its direct sales force, including 90 staff in Edinburgh, as part of a drive to cut costs.

The news comes just days after the Edinburgh-based life and pensions giant announced large bonuses for its senior executives after cutting bonuses for policy holders on long-term savings plans for the fifth time in two years.

Nathan Parnaby, the group’s managing director of sales, said: "We are continuing our commitment to direct sales, but we’re going to restructure it into three distinct

businesses - telesales, corporate account management, and a face-to-face business."

He said the company has entered into a consultation period with staff, and the firm would try to limit the number of compulsory redundancies.

The firm had booked a number of venues, including the Grosvenor and Caledonian hotels in Edinburgh, to break the news to staff.

"Standard Life has a large presence in Edinburgh in direct sales, with about 40 staff at the moment, and we will be keeping just over 30 of them."

In total, he said around 90 jobs were likely to be lost in Edinburgh, of which ten would be direct sales consultants, and the remainder back-office and support staff.

Along with Bank of Scotland, Royal Bank of Scotland and Scottish Widows, Standard Life is one of Edinburgh’s biggest employers, with a workforce in the Capital of around 8500.

A spokesman for trade union Amicus said: "It does come as a shock.

"Obviously, the first thing we want to do is meet with our members who have lost their jobs and try to arrange a meeting with company managers as soon as possible.

"You would think jobs in banking and insurance would be relatively safe, but this shows the perilous nature of the Scottish economy right now."

Mr Parnaby said: "We have done a lot of work to streamline the business, and one of the driving forces is to increase efficiency.

"Unfortunately, we will be shedding 360 jobs from direct sales, so the workforce will go from 630 to 270, and we’ll also be closing a number of direct branches around the country."

Mr Parnaby said no offices in Edinburgh are set to shut, but ten direct sales branches - in locations such as Dundee, Belfast, Chester, Leicester and London - would close, bringing the total down to 11.

He added: "But that doesn’t mean every employee there [in those locations] would go, because a lot of consultants can work from home. It is a major drive to increase efficiency, and it’s something we’re doing very reluctantly."

Last Friday, Standard Life’s annual report revealed that Iain Lumsden, who was ousted from the company’s chief executive position in January, was paid a total of £705,000 in 2003 - a 13.8 per cent rise on the previous year. Sandy Crombie, the new chief executive, who was previously head of the group’s investment division, pocketed £603,000, a 15.9 per cent rise on his total pay package for 2002.

A member of staff, who asked not to be named, said: "Various parts of the direct sales force are being called to hotels within the city, but also throughout the UK.

"The briefings are taking place all at the same time, and all outwith the workplace."

The insider added: "People are concerned and everyone’s waiting for the axe to fall. Without wanting to be dramatic, it’s something that people within Standard Life have been a bit more prepared for than at other companies - the fact that it’s been seen happening elsewhere, and speculation is rife."

Mr Parnaby added that today’s job cuts are unrelated to the company’s ongoing strategic review, which has been launched to determine whether the group should continue as a mutual owned by its 2.6 million with-profits policyholders, or float on the London Stock Exchange.

Policyholders will be updated on the review at next month’s annual meeting.