Restructuring of AXA Belgium means loss of 650 jobs

Insurance company Axa Belgium has announced a restructure, with the loss of 650 of its 4,300 jobs. According to unions, staff that remain will see their pay cut.

The job losses will take place over two years, the company said, with the first 300 gone by the end of this year. The reason for the restructuring is the continuing low interest rate, which makes selling life assurance unprofitable, Axa said.

The company said it will concentrate on areas where it is strong – pensions and damage insurance – and taper off its life assurance. It aims to save €150 million, of which two-thirds will come from salaries and employee insurance.

Two weeks ago, Axa reduced its guaranteed interest on its Cresta20 life policy from 4.75% for all deposits made until the end of 1999 on a sliding scale to only 0.2% on new deposits – a move described by Test-Achats as “unacceptable”. Two years ago, Axa Bank fired one employee in six, mainly in France, though 148 jobs were scrapped in Belgium.

Axa has applied for a restructuring status from the financial regulator, which would allow it to lower the age at which an employee can take early retirement, thus avoiding forced redundancies.

In the longer term, similar restructuring could spread to other financial institutions. “There is unrest in all of Belgium’s banks,” said Patricia Van Goel of the socialist union ABVV. “Earnings expectations on the whole are not being met.”

Photo courtesy Axa