Centrica to Cut 1,300 Jobs Amid Turnaround Efforts

Centrica, the parent company of British Gas, has announced plans to eliminate 1,300 jobs over the next two years as part of its ongoing turnaround strategy. The energy firm stated that this includes an additional 800 roles on top of the 500 redundancies disclosed last month.

The proposed job cuts will affect approximately 500 contact-based positions within the customer operations team, alongside reductions in outsourced support roles. Centrica indicated that this overhaul of customer services is a component of its broader transformation program, designed to adapt to changing customer behavior and enable more efficient operations. The company also plans to reduce roles in its group support functions to enhance efficiency.

These job losses represent an estimated 14% reduction in Centrica’s customer operations team. The company cited a 20% year-on-year decrease in average customer contacts, with approximately 90% of customers now utilizing digital channels for interaction. "In response to these structural changes in customer behaviour, we have been managing resource levels through natural attrition," Centrica stated.

The announcement coincides with the company’s reporting of an 18% drop in adjusted core profit for the six months concluding June 30. This decline was primarily attributed to the disposal of Spirit Energy assets and production outages. Warmer weather and weaker market conditions also exerted pressure on profit margins.

Despite these challenges, Centrica increased its dividend by 9% to 2 pence. Chief executive Chris O’Shea commented on the market volatility, noting that it has created difficulties in certain business areas and has slowed delivery progress. However, he emphasized the company's continued disciplined investment to strengthen its portfolio and support long-term growth, with a focus on pivoting towards more stable and predictable earnings. O'Shea added, "There is still much more to do, and by remaining nimble and bold, we can deliver our ambitious long-term targets."

Centrica shares experienced a 2.6% decline, trading at 175 pence. The energy giant welcomed the recent announcement to remove VAT on household bills but reiterated its call for targeted support for lower-income customers. The company stressed the importance of Ofgem working closely with the government to ensure the necessary policy and funding decisions are implemented.