MORE than 450 jobs will be lost at Zurich in the next nine months after the insurance firm confirmed an £81m cost reduction programme.

According to a statement issued by the firm, the cost-cutting initiative is aimed at reducing worldwide costs by a third from £569m to £390m by the end of the year. The statement said: "As part of these savings, regrettably the restructuring will also have an effect on headcount, which is expected to decline by around 450 staff in the UK Life, Zurich International Solutions and Shared Services divisions."

The redundancies will predominantly be from the Swindon and Cheltenham administration centres, which share responsibility for the operation.

A spokesman said: "It's too early to be specific about where the job losses will occur or when, but the cuts will probably be implemented some time this year."

Staff were informed on Wednesday of the proposed job losses. Both the Union of Finance Staff and Zurich's Employee Forum have been consulted and Zurich says it will attempt to 're-deploy individuals wherever possible.'

However, according to Alan Woods, general secretary of the Union of Finance Staff, the only union recognised by Zurich, it's another unexpected blow to the morale of the workforce.

"We're very disappointed," he said. "Almost a thousand staff were lost last year, and we're concerned because we worked with the company, dealing with these losses, in the hope it would put the company back on track.

"It's now getting to the point where compulsory redundancies might be the only option available, because all the obvious routes, such as identifying those staff who actually want to leave, are running out.

"We're now just left with people who want to continue to work for the company."

Zurich in Swindon currently employs just under 3,000 staff at its offices close to the railway station.

Only last month, hundreds of the company's IT staff in the town were told their jobs were at risk after Zurich admitted it was looking to outsource their services.

At the time a spokeswoman said: "We will do everything to avoid redundancies and to make sure jobs are safe."

The new cost-cutting action is part of a two- year ongoing review geared at increasing Zurich's competitiveness in the UK Life market.

Zurich's aim is to achieve performance levels that will make it top quartile in the market and deliver its stated financial targets.

Jeremy Smith