NORWICH Union is to axe 700 jobs nationwide as part of the company's continuing plans to reduce costs but Southampton workers will be spared,

The insurance giant slashed 130 Southampton jobs in December to cut costs but the latest round of cuts sees the axe fall in Norwich, York, Bristol, Stevenage and Croydon.

Nationally, Norwich Union has shed 2,350 jobs and shifted work to India in a bid to slash labour and other costs by 40 per cent.

The company, which is owned by the world's seventh largest insurance group Aviva, now employs 300 staff at its Grosvenor Square offices and a further 1,200 in Chandler's Ford in the Norwich Union Healthcare division.

Fears of the company's current focus on costs and margins creating further job losses in the region have so far proved unfounded.

Amicus, which represents Norwich Union workers, said staff would be "devastated" by today's announcement. The union said it will be meeting senior management in the next few days to discuss the job cuts and will be opposing compulsory redundancies.

National officer Dave Fleming said the 700 job losses amounted to half the total employed in the business services division.

"We will vigorously oppose any compulsory redundancies and any offshoring of these jobs abroad."

In February the group unveiled a six per cent increase in operating profits to £1.91 billion after a year in which it focused heavily on costs and margins.

However, private shareholder John Farmer was critical about more than £1m bonuses given what he described as the "shambles" of the longer-term performance.

Last year chief executive Richard Harvey was paid a bonus of £312,000 on top of his £718,000 salary, bringing his total pay package to £1.1m.