Aviva confirms additional 326 planned layoffs
September 10, 2013 by Victor Epstein
Aviva USA’s headquarters is on Mills Civic Parkway in West Des Moines
More employees at Aviva USA are losing their jobs than previously disclosed, with an additional 326 being notified that their positions will be eliminated over the next two years.
The planned job eliminations mean that about 780 of the 1,800 people employed at Aviva USA on May 1 have either left or been told their jobs are being eliminated. That’s 43 percent of the workforce at a time when states are spending millions to battle one another for jobs.
The reductions include about 300 Aviva workers who have left voluntarily and 154 who were given 60-day notice of their impending layoffs last week.
The insurer is a key economic engine locally, and its West Des Moines headquarters has helped spur residential and commercial development. However, Aviva USA’s labor force has plummeted since a New York City-based private equity firm called Apollo Global Management offered its London-based parent company $1.8 billion for it in December.
Apollo plans to fold Aviva’s annuity operations into its Athene insurance arm and sell Aviva’s life insurance business to a company called Global Atlantic.
The Register obtained a letter sent from Grant Kvalheim, president of Athene, to the 326 Aviva employees last week. Apollo officials confirmed the additional cuts Monday after being presented with a copy of the notification letter.
Kvalheim said the planned round of 326 layoffs became necessary when Global Atlantic opted to outsource some of the insurance business’ existing administrative duties to a company called CSC.
Apollo is expected to complete its acquisition of Aviva USA next month. Kvalheim said that as Athene expands, some of the 326 workers could be tapped for permanent employment again.
“We’ll certainly look at this as a pool of talent and try to hire them into new jobs,” Kvalheim said in an interview Monday. “If Global Atlantic hadn’t made the decision to hire CSC they would have taken these people as employees. The decision to outsource the life insurance administration to CSC was made by Global Atlantic.”
The sale price for Aviva’s life insurance business has not been disclosed.
Mike Miller, the Aviva USA executive tapped to head Global Atlantic’s operations in Iowa, said in a statement that it will begin with a base of more than 200 employees. They’re expected to take up residency in Aviva Investors’ current space in downtown Des Moines. Aviva Investors manages Aviva USA’s $56 billion of assets.
Nick Gerhart
Iowa Insurance Commissioner Nick Gerhart approved Apollo’s bid for Aviva USA last month, after establishing a series of conditions to ensure the private equity firm complied with insurance industry norms. He is expected to review its planned sale to Global Atlantic.
Gerhart said he’s sensitive to Aviva employee concerns, but European insurers are shedding their U.S. operations and hedge funds and private equity firms like Apollo are the most active buyers. The final three bidders for Aviva USA were all either private equity firms or those with hedge funds. There were no traditional insurers in the mix.
“As in any transitional period, there will be some reorganization,” Gerhart said. “Unfortunately this means some Aviva USA personnel will have jobs eliminated. However, both Athene and Global Atlantic have committed to being in Iowa and have plans to keep many employees permanently.”
http://www.documentcloud.org/documents/784993-aviva-plans-more-layoffs-redacted.html#document/p2
