June 18 (Bloomberg) -- ING Groep NV, the biggest Dutch financial services company, will this week ask a quarter of the 1,000 employees at its Japanese life insurance unit to leave.

ING Life Insurance Co. Chief Executive Officer Dick Okhuijsen, who is quitting the company Aug. 31, told employees yesterday the firm decided to eliminate about 250 positions in Tokyo and will offer affected staff dismissal allowances and career support, Tokyo-based spokeswoman Junko Tsuda said.

Okhuijsen sent e-mails to staff on June 2 foreshadowing the job cuts, two people with knowledge of the matter said at the time. Most of the jobs to be cut are in the variable annuity business, Tsuda said today. The firm will eliminate the positions gradually in July, August and December.

ING has been trying to expand insurance sales in Japan by allying with regional banks and the nation’s newly privatized postal service. The life insurer will stop selling variable annuities in the country after that business posted a pretax loss of 191 million euros ($267 million) for the quarter ended March 31, and will focus instead on corporate clients, it said on May 13.

The company has hired a consulting firm to help employees with career planning until they find new jobs, Tsuda said. ING will also offer additional retirement benefits based on employees’ age and length of service, she said, declining to give further details.

ING Life started doing business in Japan in 1986 and had 2.7 trillion yen ($28 billion) of assets as of March 31, according to company filings. It sells variable annuities and other products through more than 40 Japanese financial firms, including Mitsubishi UFJ Financial Group Inc., the nation’s biggest bank.

To contact the reporters on this story: Takahiko Hyuga in Tokyo at thyuga@bloomberg.net

Last Updated: June 17, 2009 23:20 EDT