UK energy supplier Ovo to cut 2,600 jobs

Ovo, one of Britain’s three biggest energy suppliers, is to shed a third of its workforce as the coronavirus crisis forces it to speed up the integration of a business it acquired this year from rival SSE.

The Bristol-based company said on Tuesday it hoped to cut 2,600 jobs, such as energy meter readers and back-office roles, “largely through voluntary redundancy”, although the restructuring comes at a time of record rises in unemployment claims in the UK.

A number of large energy companies, including British Gas owner Centrica, have furloughed thousands of workers as the UK’s lockdown has made jobs such as reading electricity meters and fitting digital smart meters in homes near-impossible.

Energy suppliers have also raised concerns about rising bad debts as an increasing number of hard-up households and businesses default on their electricity bills, or cancel direct debit payments. Suppliers have approached the government and regulator Ofgem about potential assistance for the sector.

Trade union Unite described the job cuts at Ovo as a “bitter blow” while the GMB union called on the government to stop companies that have taken advantage of its job retention scheme from making redundancies for at least a year. Ovo furloughed 3,400 workers at the start of April.

Ovo, which was founded just over a decade ago by the former City trader Stephen Fitzpatrick, said the coronavirus emergency had accelerated changes in the way customers dealt with their energy supplier, with more households managing accounts online.

This had “permanently reduced the demand for some functions and roles”, Ovo said, although it admitted it had intended to make structural changes after completing a £500m deal in January for the British household supply business of SSE.

The acquisition propelled Ovo, which was set up by Mr Fitzpatrick to challenge the might of a group of energy suppliers previously known as the “big six”, into the top flight behind Centrica and Eon. The top of the energy supplier market has undergone rapid change in the past six months with SSE exiting and Eon taking ownership of Npower.

About 80 per cent of the job losses will be from the acquired SSE business, Ovo said. The plans include the closure of two offices in Scotland — in Glasgow and Selkirk — and a third in Reading.

Mr Fitzpatrick said: “There is never an easy time to announce redundancies and this is a particularly difficult decision to take.

“But like all businesses, we face a new reality and need to adapt quickly to enable us to better serve our customers and invest in a zero-carbon future.”