Friends To Slash 600

by Stewart Douglas

Story link: Friends To Slash 600

Insurance group Friends Provident has today announced it is to cut back on some 600 full time positions, with a view to reducing its overall expenditure by some £60 million annually in order to help boost profitability amidst the current difficult market conditions.

The insurance firm has today announced it is to slash jobs across a number of its business sectors, as part of its overall strategy of cost cutting in order to improve profitability. Additionally, it has announced that it is considering offloading a number of its business units along with a significant holding in F&C Asset Management.

Friends Provident also announced that it was to take a writedown of some £440 million, accounting for most of the profit it would otherwise have reported over the course of the year, after a number of obstacles and external market factors which have made for difficult business conditions.

The news comes in a week which has seen former Standard Life boss Trevor Matthews said he would assume the role of chief executive, although he is not expected to do so until July, by which point the firm hopes to have turned around its recent fortunes.

Whilst the moves have been seen as somewhat radical, it is hoped that they should have the desired effect as far as promoting profitability and cutting expenditure is concerned.

Meanwhile it is thought that the current predicament of Friends Provident could leave it open to a takeover approach, with private equity group JC Flowers thought to be likely to be considering an offer following comments made to that effect over the course of the week.

With share prices depressed as a result of the current performance of the firm, it remains to be seen whether JC Flowers will eventually mount a bid for the firm.