Thousands of jobs to go at Centrica amid fears over energy market
● Concerns over customer losses and pre-payment cap proposals
Scottish Gas owner Centrica is to slash thousands of jobs amid concerns over warmer weather, customer losses and the UK government’s planned pre-payment cap.
The firm, which also operates under the British Gas brand, said it would cut 4,000 posts amid fears over changes to consumers’ energy bills, as well as increased competition in the market. The announcement came as it revealed in its annual results statement operating profits had fallen 92 per cent to £4 million for the year to 31 December.
The total number of customer accounts at Centrica’s UK home division, where it managed a 1 per cent rise to £819m, slumped by 6 per cent to around 20.3 million, while its UK business unit saw a 9 per cent drop to 653,000.
Centricarefusedtocomment on how many of the job losses would come from its operations north of the Border, or how many staff are employed in Scotland. The firm employs about 33,100 people worldwide and has more than 2,600 staff based in the UK.
Group chief executive Iain Conn said: “The combination of political and regulatory intervention in the UK energy market, concerns over the loss of energy customers in the UK, and the performance issue in North America have created material uncertainty around Centrica and, although we delivered on our financial targets for the year, this resulted in a very poor shareholder
0 Scottish Gas parent company Centrica’s profits dropped 92 per cent to £4 million for the year to 31 December experience. “We regret this deeply and I am determined to restore shareholder value and confidence.”
The consumer price cap, whichislikelytobeintroduced by the end of this year, will see a cap put on the amount that customers on standard variable tariffs are charged.
However, unions questioned how the firm had “got itself in such a mess”. The company has cut about 2,100 roles on a like-for-like basis over the past year, taking the total number of job cuts to 5,500 since the start of 2016.
Stuart Fegan, national officer at GMB Union, said: “Members will also question why a great institution such as British Gas has got itself in such a mess in such a short period of time. British Gas has lost 750,000 customers in 2017 and seen its share price almost halve. Last year saw hundreds of thousands of customers leaving British Gas business due to tariff rolloff on several products, with no alternative offering to customers. It begs the question – why is the UK’S largest energy provider happy to haemorrhage customers?”
David Elmes, head of the Global Energy Research Network, said: “Many of the customers who left this year were on low price deals that Centrica lost money on. Centrica wants to sell services that help customers use energy more efficiently and a cap may limit their ability to do that.”