Friday, 20 July, 2018

British Gas owner to cut 2100 more jobs as profits drop

The owner of British Gas plans to cut 4,000 jobs over the next three years The owner of British Gas plans to cut 4,000 jobs over the next three yearsPAUL HACKETT BLOOMBERG VIA GETTY IMAGES
Nellie Chapman | 23 February, 2018, 01:28

Unite regional coordinating officer Paresh Patel said centrica's plan "needs to be put under the microscope".

It compounded pain caused by a drop in its North American business unit, resulting in a 17% fall in group adjusted operating profits to £1.25 billion, although on a statutory basis, operating profits plunged 80% to £486 million. This included the loss of 1.4 million energy supply accounts, corresponding to 750,000 customers.

Centrica group operating profits slumped by 17 per cent, however, to £1.25 billion after a "weak" performance and falling profits in its business supply arm in the United Kingdom and North America. The company made a profit margin per customer of about 5%, or £59.

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.

British Gas' owner, Centrica, has announced they are cutting 4,000 jobs and blamed political meddling in the United Kingdom market for its "weak" end to 2017.

The group said that it was chasing savings of £1.25bn per year by 2020 and that this would likely see a "reduction in like-for-like headcount of around 4,000" by the same year.

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

The company has also announced that it plans to cut 4,000 jobs in the same period. "We've got to respond to the circumstances". The government is planning to cap the standard variable tariffs.

In a statement, the Union said it wanted to know why the company planned so many job losses despite parent company Centrica making 2017 profits of £1.25bn.

Conn said British Gas is already less exposed than many competitors: "Relatively our [SVT] is already £41 below the average of the other large suppliers, and actually its £100 below some of the highest prices in the market".