UK's largest insurance group Prudential has cut over 70,000 of its staff in India following new regulations on the industry which the company claims will hurt its short-term sales prospects, The Times has reported.
The insurer has brought down its workforce in India by 28 per cent to a total of 176,000 after new restrictions on charging and the imposition of lock-in periods for policyholders purchasing unit-linked products.
According to the company, the rules would cause Prudential's sales volumes and profit margins to "decrease sharply" in the short-term. Employees who were laid off were reportedly those hired on a commission-only basis. Prudential expects poor sales in its India division to persist or even worsen over the year.
Since the regulations came into force in September, Prudential's business sales for this month have reduced by 48 per cent from the previous. However, the company's chief executive Tidjane Thiam was positive about the regulator intervention, saying that in the long run it would make for a better savings culture and increase sales.