Insurance giant slashes staff

Nick Huber

Commercial and General Norwich Union (CGNU) is to axe hundreds of IT staff jobs by closing down one of its main IT...

Nick Huber

Commercial and General Norwich Union (CGNU) is to axe hundreds of IT staff jobs by closing down one of its main IT centres.

The recently merged insurance giant plans to shut down its Whyteleafe office in Surrey next year as part of wide-ranging restructuring. The Whyteleafe office is the IT centre for Commercial General Union, which employs about 340 IT staff.

In an internal announcement this summer, CGNU told its Whyteleafe IT staff that it would to close the plant at the end of next year.

A spokesman for CGNU said it would try to retrain staff for other jobs but said job losses were inevitable. "It is unrealistic to say that we can find jobs for 340 people," he said.

CGNU plans to centralise its IT functions in Norwich, Computer Weekly understands. However, a senior source at CGNU has warned of opposition from CGNU's main IT offices. He also said there has been unrest over the company's restructuring plans among IT staff since the merger.

The centralisation of IT functions to the former Norwich Union head office means the former Commercial and General Union (CGU) office in York will lose its IT autonomy, including control of its network, Internet connection and services.

A source at the company said, "They can say they will provide IT infrastructure with all the will in the world but there will be resistance and problems. Clearly the Life office in York is none too happy about central services, including IT. They haven't accepted it yet."

He added that other areas of the IT restructuring were running smoothly, but raised questions over the suitability of outsourcing arrangements made before the merger.

In 1999 Commercial and General Union signed a seven-year, £124m outsourcing contract with IBM for its Perth office, covering software, hardware and technical support.

"It doesn't fit neatly with the other operations and was in place before the merger, " said the CGNU insider.

A CGNU spokesman said he was unable to comment on the IBM outsourcing arrangement or the centralisation of IT functions.

One industry analyst said, "The outcome of centralising IT is everything to do with who calls the shots. In this case its Norwich Union."

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