British Gas parent company Centrica will axe 5,000 jobs blaming impact of coronavirus
- On Thursday it was announced that British Gas will undergo a restructuring
- As a result its owner Centrica will remove about 5,000 jobs as they slimiline
- Most job cuts will take place in the latter half of 2020 with a lot of managers axed
- Here’s how to help people impacted by Covid-19
British Gas owner Centrica plans to cut around 5,000 jobs, almost 20 per cent of its global workforce, it said on Thursday, as the energy utility deepens its restructuring efforts in the wake of the Covid-19 pandemic.
More than half of the job losses are expected to come from management teams and follow 4,000 cuts planned by this year which were announced in 2018. It hopes to make around £2billion worth of efficiency savings by 2021.
‘The harsh reality is that we have lost over half of our earnings in recent years. Now we must bring focus by modernising and simplifying the way we do business,’ Group Chief Executive Chris O’Shea said in a statement.
British Gas will lose 5,000 employees as its company Centrica will slimline due to Covid-19
Centrica announced the news on Thursday with many cuts happening in the latter part of 2020
Chris O’Shea, CEO of Centrica, says they must focus on ‘modernising and simplifying’ work
‘I truly regret that these difficult decisions will have to be made and understand the impact on the colleagues who will leave us.
‘However the changes we are proposing to make are designed to arrest our decline, allow us to focus on our customers and create a sustainable company.’
The GMB union vowed to fight the cuts, with spokesman Justin Bowden saying: ‘A combination of the (energy price) cap and too little, too late management decisions have left a once proud brand crippled and weak.
‘Slashing thousands more jobs is not the answer. You cannot just cut your way out of a crisis.
‘GMB will fight for every single job.’
Centrica on Thursday also announced Johnathan Ford as its new finance chief.
The company has seen the pandemic curb energy demand and has had to adapt to a price cap imposed in 2019 on the most common energy tariffs in Britain.
Earlier this year it canceled its dividend for 2019 and warned of an increase in non-payments by customers.
It said its latest restructuring push would lead to fewer customer-facing business units and that the job cuts could come as soon as the second half of this year.
Centrica currently employs around 27,000, with around 20,000 based in the UK.
There’ll be a removal of three different managerial layers as part of the company’s restructure
A spokeswoman for the company said it was unable to disclose the locations for the proposed job cuts as they are subject to consultation, but said the proposed changes would be across all divisions of the company.
Centrica shares were down around 4.5 per cent in early trade on Thursday.
Although it is still by far the biggest energy supplier in Britain, British Gas has been squeezed by increased competition in recent years.
The company has lost around half its earnings in the past decade, as smaller suppliers chipped away at its market share, from a quarter in 2013 to 19 per cent today.
The rise of smaller suppliers was capped off last year when Ovo Energy, which was only founded in 2009, bought SSE.
Last month Ovo announced that it would axe 2,600 roles at the combined business, as the coronavirus pandemic sped up its restructuring plans.