Swiss Re to cut 1,000 jobs

3rd April 2009, Comments 0 comments

The reinsurer giant plans worldwide job cuts through April 2010.

ZURICH - Swiss Re, the world's biggest reinsurer, on Thursday said it would cut around 1,000 jobs worldwide in the next year to cut costs.

"Swiss Re intends to reduce its current global headcount of 11,560 by approximately 10 percent over the next 12 months. Any reductions will be undertaken in compliance with applicable laws and regulations," it said.

The group posted a record annual loss of CHF 864 million (EUR 585 million, USD 735 million) in 2008, as earnings were hit by investment losses.

Its chief executive officer Jacques Aigrain announced his resignation a week after it posted its earnings in February and was replaced by the group's deputy and chief operating officer Stefan Lippe.

In a statement Thursday, Swiss Re said that Agostino Galvagni, who heads the global and large risks division, was appointed to take over as chief operating officer from 1 May.

The Zurich-based group added that it was "accelerating efforts to simplify the organisation and improve operational effectiveness.

"As previously announced, this will lead to running cost reductions of CHF 400 million by the end of 2010," it said.

Analyst Stefan Schuermann at Bank Vontobel said the job cuts indicated that the reinsurer did not expect revenues to increase.

"It is among the first insurance groups to announce such a big step in terms of employees, reflecting the challenging market conditions," he said.

Bank Helvea's Tim Dawson said Swiss Re was "heading in the right direction."

However, he noted that the "future shape of the group is still unknown.”

The group's shares closed up 10.63 percent at CHF 21.44, outperforming the overall Swiss Market Index, which rose up 3.26 percent, lifted by progress made by the G20 summit to deal with the global economic crisis.

The reinsurer's shares fell by about a fifth since its troubles emerged in November 2007, when it warned of CHF 1.2 billion in losses from the US subprime home loan crisis.

In 2008, it sold a 3.0 percent stake in the company to Warren Buffett for an undisclosed sum as it sought to support its finances.

AFP / Expatica

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