Britain’s Largest Energy Supplier to Cut 4,000 Jobs

LONDON — Centrica, the largest supplier of energy in Britain, said it would cut about 4,000 jobs by 2020 as profits fell and it continued to lose customers.

The company reported a 17.4 percent fall in full-year operating profits, to 1.25 billion pounds, about $1.7 billion.

Centrica’s chief executive, Iain Conn, said the firm had a “weak” second half of 2017, and it was not helped by political and regulatory intervention in the United Kingdom, according to Bloomberg.

The job losses, which are part of an extended cost-cutting program, would fall mainly in its energy supply business in Britain. The company said it expected to reduce about 1,000 jobs on a like-for-like basis in 2018 and save about 200 million pounds.

The utility, which owns British Gas, shocked the market in November by saying that its full-year adjusted earnings per share would be around 12.5 pence, against forecasts of 15 pence, largely because of its North American and British businesses were hit by tough competition and warmer-than-expected weather-cutting demand.

British Gas, which supplies 7.8 million customers, shed 9 percent of its domestic customers in 2017.

Around 12 million British households are charged some form of default tariff for their energy, which can cost hundreds of pounds more per year than the cheapest deals on offer. The government is planning to cap the standard variable tariffs.

Centrica’s shares have lost more than half of their value over the past year as politicians have focused on ways to limit the cost of energy to ordinary consumers. Britain’s big energy suppliers have been under pressure from smaller rivals offering cheaper deals in the consumer market.

Mr. Conn told the BBC the job losses resulted in part because of “intense” competition and partly because of customers “moving to digital.” But he also said the probable introduction of a price cap was another reason for the job losses.

“There is a link between our cost efficiency program and preparing for any price cap in the U.K.,” he added. “We’ve got to be competitive and this measure means we’ve got to drive more efficiency.”

Investment in technology and the simplification of core business processes would result in cost savings of 1.25 billion pounds per year by 2020, the firm said. It expects to also create around 1,000 additional roles.

Despite the fall in profits for Centrica Group as a whole, British Gas saw profits rise 3 percent, to £572 million.

The energy supplier also has operations in North America and Ireland.

Content originally published on by THE NEW YORK TIMES