Job losses on the cards
Quakers founded Friends Provident, but its takeover by Resolution could cause quaking amongst staff in the two organisations - and all life and asset management companies.
Resolution and Friends Provident agreed an 8.6bn merger last month, creating the UK's fifth-biggest life assurer. But what's good news for business may not be such good news for jobs.
Nick Boakes of Friends' press office is sanguine about employment prospects in the newly-named 'Friends Financial': "The two operations come together with fully complementary skill sets to give the combined operation opportunity for future growth. It is not a about cutting costs," he says soothingly.
Others are less placatory. Tim Young, insurance analyst at Collins Stewart, says the deal confirms that consolidation of the life sector has begun and predicts cuts are likely to ensue: "Reduction is the order of the day; it sounds very much as if Resolution will take the upper hand."
Even more ominously, Young predicts more consolidaton and more job losses in future: "Life companies are scaleable, they do not need two back offices, two plc costs etc. I would expect to see a very swift and savage attack on admin jobs."
Front-office folk will not be immune from cuts, he adds: "The front line is also scaleable. Who needs two technology analysts? They won't need two UK income funds."
