AMP to shed another 2000 jobs in major restructure

By NZPA

Wednesday 4th December 2002

Financial services giant AMP Ltd today said it would axe another 2,000 jobs from its global operations as part of a major restructure.

AMP said it would cut another 1,900 jobs from its operations in the United Kingdom plus 100 from its Henderson Global Investors business around the world.

The job cuts come on top of 2,700 job cuts already announced by AMP in the past six months.

A spokeswoman for AMP in New Zealand said there would be no job cuts in New Zealand.

AMP chief executive Andrew Mohl said the group had increased its expected cost savings from its UK operations to STG160 million ($NZ508 million) in full year 2003 from an original forecast of STG100 million ($A280 million).

"These have been difficult decisions to make because of the impact on our people," Mr Mohl said.

"However, given tough equity markets and the well publicised issues of the UK life market, we have no choice.

"We will do everything possible to minimise the number and consequences of redundancies.

"AMP is making these changes because we are committed to the UK market and we want to have a competitive sustainable business.

"In particular, we continue to believe there is a strong need for face-to-face advice in the UK, particularly serving the needs of customers pre-and-post retirement."

Mr Mohl added that all AMP's UK entities were meeting minimum capital requirements in Britain, with its troubled Pearl life insurance fund on track to meet requirements by December 31.

However, he said the future of AMP's other assets including its Virgin Money joint venture, AMP Japan and Cobalt was still being decided.

Options included sale, closure, break-up or restructuring. An announcement is expected in 2003.

AMP said it was targeting cost savings from its Henderson operations so the business could focus on growth areas.

The business will scale back its operations in Japan and Hong Kong and running Asian operations from Singapore at the same time as accelerating product rationalisation.

As a result, 100 jobs will be cut from its global operations.

Last month, AMP revealed it would write off $A1.2 billion worth of assets this year.

Of the $A850 million in UK writedowns, $A612 million relate to NPI, $A110 million to Towry Law, $64 million to Ample and $A64 million in Pearl.

Other assets including Virgin Money, AMP Japan, AMP Finance and Gordian comprise a possible $A350 million of the writedowns, AMP said today.

Total group restructuring costs, including redundancies, are expected to reach $A320 million after tax and will be recognised in AMP's accounts for the year to December 31, 2002.

Mr Mohl said he believed that while conditions in the wealth management business globally were expected to remain difficult, the longer term dynamics of the industry remained attractive.

He added that he wanted to grow AMP's position in the Australian wealth management market and reduce the company's capital commitment in the UK and develop its wealth management business there.

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