Royal & Sun Alliance plans to cut thousands of jobs worldwide over the next two years as part of its...
Royal & Sun Alliance plans to cut thousands of jobs worldwide over the next two years as part of its restructuring program that focuses on boosting outsourcing and disposing of non-performing assets.
Acting chief executive Bob Gunn, standing in while the company looks for a successor to Bob Mendelsohn, announced the job cuts along with the company's third quarter results.
3,100 staff will go in the UK: 1,600 from the outsourcing of administrative staff previously attached to the now sold life business; 900 from the general business side; and a further 600 from the outsourcing of facilities management and IT systems roles.
Another 1,500 jobs will go in the US by the end of 2004, while most of the Asia-Pacific business will be sold off through an IPO sometime in the first half of 2003.
Altogether the changes should enable the company to raise the £3.6bn in additional capital it says it needs to survive the current business cycle.
Gunn says the company will sell any business that does not meet performance targets, that presents a high business risk, that does not have a competitive advantage in a particular sector, or that would present good value to shareholders if it were sold.
That could bring in up to £2.5bn by the end of 2004, he adds.
R&SA reported sales of £6.1bn in the first nine months of the year, resulting in a pre-tax loss of £156m equivalent to a loss per share of 9.2p.
That is a big turnaround from the loss per share of 50.1p reported for the same period last year, but the company still faces some big problems.
A loss was still a loss as far as the stock market was concerned, which pushed shares up by 2p to 120p.
Credit ratings agency Standard & Poor's downgraded R&SA's debt to "A-" from "A", which will make debt servicing more expensive.
The company is also having to beef up its provisions for asbestos-related claims, something hitting all insurers on both sides of the Atlantic, with claims from various US and European court cases climbing above the $200bn level.
Above all, the company remains rudderless as long as the search for a new chief executive goes on.
Chairman Patrick Gillam says a decision on this is expected "in the near term".
An ambitious objective
'Something completely new'
'Illusion of control'
Reasons to be cheerful
Total investment reaches £9m