LONDON • Centrica plc is set to cut 5,000 jobs before the end of the year in order to meet its cost-cutting targets as the uncertainty of the coronavirus pandemic accelerated losses.
The job cuts, which amount to around 19% of the utility’s workforce, include 2,500 roles in senior management. Half of the 40-person leadership team is to leave by the end of August, the company said in a statement. Centrica is the UK’s biggest energy supplier to homes.
Chris O’Shea was appointed CEO of Centrica just three months ago at a low point in the utility’s history. The utility has haemorrhaged customers through increased competition with smaller utilities. Its share price has fallen 86% since the start of 2015 and earlier this month it was demoted from the FTSE-100 UK benchmark stock index after 33 years.
“I believe that our complex business model hinders the delivery of our strategy,” O’Shea said in the statement. “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.”
The biggest names to exit the firm include Sarwjit Sambhi, chief executive of Centrica’s consumer division, and Richard Hookway, chief executive of the business unit, who’ll both leave by the end of July. Their positions on the board won’t be replaced, Centrica said.
Lower oil and natural gas (O&G) prices combined with a regulatory price cap have caused earnings to plummet. In April, Centrica paused the divestment of its North Sea oil and gas assets and withheld its final dividend payment as the impact of the coronavirus rippled through the energy industry.
The company had already pledged not to pay any bonuses to its management for 2019 and cut capital expenditure by £400 million (RM2.15 billion). In February, the company booked a £1.1 billion charge on its Spirit Energy Ltd arm and nuclear assets. O&G prices have slumped dramatically since then.
O’Shea, appointed Johnathan Ford to his own previous role as CFO. Ford was COO and CFO at Homeserve plc. — Bloomberg