THE south will feel the effects of plans by insurance giant Pearl to axe 2,500 jobs in the UK.

The Australian-owned company claims to handle financial work for up to one in ten of the UK population but is now cutting its entire sales team, including those based in the south, as part of a massive review of operations.

Union bosses from Amicus said it now feared for the future of the company, which employs 7,000 workers in the UK.

The cuts will affect around 1,000 sales jobs and 1,500 administrative workers with Cambridgeshire being the worst hit.

Amicus general secretary Roger Lyons said the announcement had left staff feeling devastated.

"Pearl was once proud to be one of the few companies with a field sales force. Now it seems they are prepared or have been forced to abandon it," he said.

"The scale of the job losses has left the staff devastated and leads us and our members to fear the worst."

Union officials were meeting the company to try to avoid compulsory redundancies and to find out the extent of the firm's difficulties.

Mr Lyons said he would be seeking a face-to-face meeting with the chief executive of Pearl's parent firm AMP, about the prospects for workers left with the company.

The decision wipes out Pearl's 1,000-strong direct sales force, one of the last remaining bands of door-to-door salesmen in the UK life insurance industry.

The announcement followed a review initiated by chief executive Andrew Mohl and follows a shake-up at the group that saw five senior executives, including managing director of UK financial services Tom Fraser, leave the company.

The review has looked at the entire UK business, including Pearl, life insurer NPI, fund manager Henderson Investors and the group's 50 per cent stake in Virgin Money.

The UK accounts for about 60 per cent of AMP's sales, but when Mr Mohl announced the review he said the group had abandoned plans to become a top-five player in the UK life insurance market.

He also warned that Pearl's sales force could not survive in its present form, claiming it was not economically sustainable.

The group has seen its share price dive by nearly 50 per cent during the past few months.

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