British Gas owner Centrica has put in place a pay freeze for non-customer facing staff in moves to cut costs by around £400m.
The group is preparing for a big hit as it sees plunging business energy demand amid the coronavirus lockdown.
While it is seeing demand for energy among households who have been forced to stay at home, it said it was being affected by a “more significant” impact from falling business energy use as firms have temporarily shut.
Centrica, headquartered in Windsor, Berkshire, also expects to see an increase in working capital outflows and customer bad debt, as some customers defer payments due to the reduction of household incomes and business revenues.
As well as the pay freeze for many staff, Centrica is also deferring all employee cash bonuses and scrapping its final shareholder dividend payout, which was expected to be around £204m in total cash outflow.
It is also delaying over £100m of restructuring spend.
The group has stopped non-essential customer visits to protect staff amid the pandemic, but said it still has several hundred UK service engineers who have volunteered to carry out essential home visits to ensure energy supply is maintained for customers.
Chris O’Shea, interim group chief executive at Centrica, said: “As the scale and length of the crisis unfolds, it is becoming increasingly clear what a vital role so many of the Centrica team perform to keep our communities warm, safe and supplied with energy.
“I am extremely proud and humbled by the response of colleagues, and on behalf of the board I would like to say how grateful we are to them.
“While there are so many uncertainties surrounding the impacts of this situation, I am confident that we have acted promptly and prudently to underpin the long term strength of Centrica.”
Last month, Centrica's two top bosses - chief executive Iain Conn and chairman Charles Berry resigned.
Mr Berry had been on medical leave since the beginning of February, while Mr Conn had already said he would step down this year, but the move left their successors to deal with the volatility caused by coronavirus.
