Centrica to cut 4000 jobs and sell United Kingdom nuclear holdings

Ivan Schwartz
February 23, 2018

Adjusted operating profits from Centrica's UK Home division accordingly fell by just 1 per cent year-on-year to £890 million, despite warmer weather and the introduction of the prepayment price cap.

The total number of customer accounts at its United Kingdom home division slumped 6% to around 20.3 million, while its United Kingdom business unit saw a 9% drop to 653,000.

The energy giant's new "cost efficiency programme" is expected to involve around 1,000 job losses this year, rising to a total of 4,000 by 2020, the Financial Times reports. It lost 23% of its I&C customer base and 5% of SME customers.

Chief executive Iain Conn apologised for a "weak" second half, which he said was mainly due to the poor performance of the firm's commercial division, particularly in North America.

This demonstrates how fierce competition has become from the multitude of smaller independents actively encouraged by United Kingdom policy on switching suppliers.

However, he also attributed some job losses to the pending price cap on energy tariffs, although he refused to quantify the impact.

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The majority of the 4,000 jobs lost will be in the United Kingdom, where 30,000 of its 35,000-strong global workforce are based.

"We are not blaming anybody", said Conn.

Energy firms like Centrica have been facing pressure over the way they treat customers in the United Kingdom, with controversy over pricing and the use of standard variable tariffs (SVTs) which have been deemed poor value for consumers.

In 2018 alone, the firm aims to reduce spending of £200mn ($277.5mn) and to lose 1,000 jobs.

"Unite will be asking for an urgent meeting with British Gas management to hear the business case in detail for these job losses - the company has not been clear where these cuts will take place". "That means others are going to hurt first and more than us as long as we maintain that competitive position".

Centrica also announced plans to divest its interests in existing nuclear generation in the United Kingdom by 2020. "We are not a natural owner and it's a minority stake with limited control", said Conn, adding that buyers might include infrastructure funds.

Other reports by GizPress

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