100 jobs to go as Old Mutual keeps Skandia

Old Mutual said on Wednesday it will hold on to Skandia and expects to double the funds under management within the next five years, according to a company press release.

“Skandia is every bit as good a business as we believed, with the potential to double in size over the next five years,” said Julian Roberts, Skandia’s chief executive.

“Sales growth is strong and there is a talented team in place keen to move the business forward as we implement a series of initiatives to deliver Skandia’s fullest potential.”

However, Old Mutual said that it would axe up to 800 jobs in Britain and across Europe in cost savings over the next three years following the recent takeover of its Swedish rival.

The news came alongside a stock market update on the integration of Skandia. The job losses represented around 13 percent of Skandia’s workforce, Old Mutual chief executive Jim Sutcliffe said in a conference call with reporters.

Some 600 jobs would be slashed in Britain, owing to the integration of computer networks, while around 100 positions would be cut in Sweden. Others could go elsewhere across Europe, he said.

A spokeswoman for Old Mutual said that the job losses accounted for a much smaller percentage of the group’s total global workforce of 55,000 people.

Old Mutual said today that it would generate annual merger synergies of some £70 million by mid-2008 – including the cost savings related to those redundancies.

The company added that total restructuring costs would amount to £80 million, up slightly from an original forecast of £71 million.

Old Mutual completed the £3.6 billion takeover of Skandia in February after a lengthy hostile battle for the firm.