The long anticipated job cuts at Peal Insurance, the loss making U.K. subsidiary of Australia’s AMP, have finally been announced. CEO Andrew Mohl said yesterday that the company plans on reducing its workforce by around 38 percent, which means around 1900 jobs are due to be eliminated.
AMP operates three U.K. subsidiaries, Pearl, London Life and NPI. It already cut around 1500 jobs last June, and indicated at the time that poor business conditions would probably mean more job losses. Pearl’s decision to drastically reduce its field sales force comes on the heels of similar decisions by other U.K. life companies, as costs of maintaining a large number of employees mount. Even the venerable “Man from the Pru” has disappeared from the English scene.
The decision follows a thorough review of AMP’s financial condition, ordered by Mohl when he replaced Paul Batchelor as CEO last September. Most of the company’s troubles can be traced to its U.K. operations, particularly Pearl, which has required large additional reserves. AMP’s U.K. operations currently account for around 60 percent of its total sales, but they’ve become too costly.
The company has abandoned plans to become a major player in the U.K. market, and will concentrate more capital on its home markets in Australia.