The city’s jobs market took a big blow Wednesday, with Aegon Insurance Corp. announcing that it is consolidating its Louisville operations that will result in hundreds of jobs being moved to the company’s primary locations.

There are currently 400 employees who work at the domed Aegon Center in downtown Louisville, and about 120 of those jobs will stay with 280 employees being laid off or transferred to Baltimore and other cities.

The move is a strategic business decision, says Aegon spokeswoman Cindy Nodorf, adding that the company has taken a number steps to lower expenses. The move is an effort to leverage resources and streamline operations, and the company plans to reduce its entire U.S. workforce by 5 percent over the next two years.

The employees whose positions are being eliminated received a 60-day notice this week, with varying amounts of severance based on years of service to the company. The transition will take place at the beginning of 2011.

“We are disappointed by Aegon’s decision to move much of its Louisville operations to the company’s headquarters in Baltimore,” Mayor Jerry Abramson said in a statement. “Because Louisville is by far the smallest piece of their U.S. operations, Aegon made a financial decision to consolidate and they simply did not give us the opportunity to make the case for keeping jobs here. Aegon’s leadership told me they plan a gradual transfer of 300 of the 400 Louisville-based jobs over the next 12 months. We will work diligently to help find jobs for as many of those employees as possible.”

The announcement comes weeks after the conclusion of tight mayoral campaign where both candidates focused heavily on job attraction and creation.

These losses also highlight a number of troubling statistics that were reported earlier this year, which showed the city’s job market suffered tremendous losses over the past decade well before the national recession of 2008.

Last month, for instance, LEO Weekly reported that from January 2000 to January 2010, the Bureau of Labor and Statistics showed that Louisville shed 34,600 private sectors jobs. Those losses represented a 5.5 percent decrease over ten years, while other cities such as Nashville and Indianapolis were gaining jobs over that time.

In a report conducted by the University of Cincinnati and Northern Kentucky University dubbed “The Regional Indicator Report,” that examined 15 different economic criteria including quality of life and educational attainment across 12 cities, Louisville ranked dead last, below Cincinnati (10th) and Cleveland (11th).