Insurance giant Clerical Medical is axing 115 jobs at its Clevedon office.

The company, now owned by banking giant Lloyds TSB, is merging its sales and support teams for Scottish Widows and Clerical Medical – and said yesterday it would be making 305 people redundant in the UK by July 1.

Staff affected in Clevedon – around one in six of the office's 600-strong workforce – work in customer services for Clerical Medical.

The Clerical redundancies are thought to be the first of hundreds as Lloyds integrates the HBOS group, which it bought in January for £12 billion.

It is the second major blow to Bristol's financial sector in the space of a week, with the announcement coming just six days after Royal Sun Alliance announced it was to close its office in the city centre, with the loss of 500 jobs.

Staff at Clerical Medical were called into a meeting at around 3pm yesterday to be told the news, although the company said it would only make compulsory redundancies as a "last resort".

The move also marks the start of the phasing-out of the Clerical Medical brand, which will no longer be used for new business.

A further 190 sales staff in Clerical offices across the UK will be affected, but HBOS confirmed no employees at its Harbourside HQ site in Bristol, which has 1,600 staff, will be made redundant as part of the move.

In a letter to staff, Archie Kane, group executive director of the insurance division, said: "We have today announced that the Clerical Medical and Scottish Widows intermediary sales forces will come together on July 1 under the Scottish Widows brand.

"The merger of the sales forces will combine the best from both companies and will also be effective from July 1.

"We are also announcing that the Clerical Medical brand will, over time, no longer be used for new business. There is no change, however, for existing Clerical Medical customers."

He added that the existing Clerical Medical head office in Bristol and the Scottish Widows head office in Edinburgh will "very much remain in place, with support from our regional offices."

Ged Nichols, general secretary of the Accord union, which represents the company staff, said: "The announcement is sad news for the loyal and efficient Clerical Medical workforce.

"Accord believes that Lloyds Banking Group (LBG) has a responsibility to work with us to do everything we can jointly to avoid compulsory redundancies.

"Whilst Accord recognises that there is a clear overlap between Clerical Medical and Scottish Widows, LBG should not be tempted to seek unnecessary job cuts to achieve short-term cost savings to the detriment of the long-term future of the businesses, the parent bank and the UK economy as a whole.

"Accord is in ongoing talks with the bank and will be contacting all the other relevant stakeholders to discuss possible solutions. We also believe that UK taxpayers will expect the Bank to work in partnership with Accord and the other unions representing its employees to minimise unnecessary unemployment, particularly given the support that UK taxpayers have provided to the bank."

Lloyds' £12-billion buyout of HBOS – and rumours of job losses after a merger – were first revealed in September.

In the Bristol area, Lloyds TSB has around 2,100 staff at its flagship Canons House building in Canons Marsh, where it moved in 1990.

It also has 1,000 staff in five other Bristol city centre premises, and a further 1,000 in branches across the city and surrounding area.

HBOS has a £20-million flagship HQ next door to Lloyds on the Harbourside.

The HBOS building houses 1,500 staff across the HBOS brands of Clerical Medical, Halifax Financial Services, Bank of Scotland Investment Service and Bank of Scotland Annuity Service.

HBOS also has a further 1,500 staff working across its Halifax building society, Bank of Scotland branches and Halifax estate agents across the Bristol area.