British Gas is to axe almost 700 jobs and close its West Midlands office in Oldbury, just two months after its residential supply arm reported a 31% increase in profits to over £570m.
The 684 staff are employed by British Gas services in call centre and back room office work supporting the company’s engineers who attend call-outs and mend boilers.
Claire Miles, managing director of customer operations at British Gas, said she recognised the latest announcement was difficult news for affected employees but said it was necessary to make the business more efficient.
“Since last summer British Gas has been implementing a strategy to improve service and reduce costs, to ensure we can price competitively. We must also respond to the changing needs of our customers, and they increasingly want to contact us online,” she said.
“For these reasons we are planning to consolidate our activity on fewer sites, and we have made the difficult decision to propose closing our Oldbury office and call centre.”
The work undertaken at the Oldbury office will be taken on by three existing sites, at Stockport, Leicester and Uddington, outside Glasgow.
The chief executive, Iain Conn, announced last summer that he planned to cut 6,000 positions across the group, with 5,000 in Britain.
The latest cuts announcement comes two days after the parent company, Centrica, admitted it had lost 220,000 British Gas domestic customers in the first three months of the year. The admission came at the company’s annual general meeting where there was criticism of Conn’s £3m annual remuneration package awarded in 2015.
All of the big six energy suppliers are under pressure as a result of falling power prices and increasing competition from a new generation of small independent companies such as First Utility, Ovo Energy and Ecotricity.
Last year the residential gas business increased its profits but Centrica as a whole reported adjusted operating profits down 12% to £1.5bn.
Unions expressed deep concern at the latest cutbacks. Matt Lay, the national energy officer at Unison, said: “This is terrible news for the company’s Birmingham-based employees, who will be devastated at the prospect of losing their jobs. British Gas might be losing customers, but it’s still a very profitable business.”
Fuel Poverty Action, a campaign group for those struggling to pay their energy bills, claimed annual figures released in February showed the company was profiteering at the expense of hard-pressed consumers.
The company has always denied this, although the Competition and Markets Authority has called for a series of changes in the way companies operate after concluding that energy bills were much higher than they need be.
- This article was amended on 20 April
