Co-op plans to axe 2,000 jobs

CO-OP Insurance has announced plans to axe 2,000 jobs – a fifth of its staff - in a sweeping modernisation of the 137-year-old service.

Around 2,500 jobs will be lost but up to 500 new 'customer facing' positions will be created over the next 18 months. CIS, which has around 5.5m customers, is one of the few insurers to continue visiting customers, and employs more than 3,000 home service financial advisers.

It said the shake-up was intended to ensure future profitability amid changing economic and market conditions.

'We have been briefing staff today,' a spokeswoman said, but added: 'We don't know exactly which departments the potential job losses will be in yet.'

The CIS, which employs 10,000 staff, is part of the Co-op Group, one of the largest consumer co-operatives in the world.

The Manchester-based society, which is owned by its members, aims to 'share a set of values and principles based on honesty, openness, social responsibility and caring for others'.

Mervyn Pedelty, chief executive of Co-operative Financial Services (CFS), said: 'CIS has a strong reputation with its large and loyal customer base, an enviable level of customer trust and a robust capital position.

'CIS is not immune, however, from the intensifying economic and competitive pressures occurring within its core markets and we need to take action now to ensure a vibrant, successful and sustainable future for our business.'

The company said the restructuring would allow it to help millions of 'ordinary' households with its savings and insurance products rather than just the 'better-off segments of the population'.

Amicus, the largest union at CIS, pledged to fight the cuts. 'The proposed job losses are deeply disappointing to us, but reflect the difficulties all insurance companies face in a cut-throat market, burdened with ever-tightening

regulation,' said David Fleming, national officer for the finance sector.

'Whilst we accept that CIS has to change and modernise, we will vigorously oppose compulsory redundancies, and we'll seek to maximise redeployment and retraining opportunities for those affected.'