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Ovo Energy, Britain’s second biggest energy supplier, is to cut 2,600 jobs and close offices as lockdown drives more customer services online.
The decision comes just four months after Ovo bought SSE’s retail division for £500m, instantly increasing its customer base from 1.5m to 5m homes.
Announcing the cuts on Tuesday, Ovo said the Covid-19 pandemic had accelerated a shift in customer behaviour, with more people going online, which had permanently reduced the need for some functions and roles.
The job losses will affect gas engineers, electricians, meter readers, and call centre staff and the company will close its offices in Glasgow’s Waterloo Street, Selkirk and Reading. Jobs are also expected to go at offices in Perth, Cumbernauld and Cardiff.
The GMB union accused Ovo of betrayal, saying it had promised that there would be no job losses after the takeover of SSE’s retail business.
Justin Bowden, a GMB senior organiser, said: “Coronavirus outbreak or not, this is a massive betrayal of promises made to workers and politicians that the sale to Ovo would not result in job losses.
Ovo said the cuts would be made “largely through voluntary redundancy” over the course of this year.
Stephen Fitzpatrick, the Tory donor who founded Ovo and remains its chief executive, said: “Today is a very difficult day. What should have been a much longer process to digitise the SSE business and integrate it with Ovo has been accelerated due to the impact of the coronavirus.
“We are seeing a rapid increase in customers using digital channels to engage with us, and in our experience, once customers start to engage differently they do not go back. As a result, we are expecting a permanent reduction in demand for some roles, whilst other field-based roles are also heavily affected.”
Since the Covid-19 lockdown began, Ovo’s smart meter installations have fallen 92% and home service engineering work has dropped by 69%. Meter reading has completely stopped since March.
Prior to the acquisition, SSE had begun an offshoring programme, moving UK jobs abroad, with hundreds more jobs due to follow. Ovo suspended the additional offshoring round, minimising UK job losses.
Bowden said: “Whilst we were able to save 700 jobs from offshoring for now, this is still 2,600 good UK jobs from a company that is busy soaking up taxpayers’ money from the furlough scheme. GMB says companies who take government money from the job retention scheme (JRS) should be prevented from making redundancies for at least a year.”
The Unite union’s national officer for energy and utilities, Peter McIntosh, said: “This is devastating news for the loyal and dedicated workforce who have continued to provide emergency and essential services to customers throughout the Covid-19 crisis.
“We will be pressing the company to explain why it is not continuing to take advantage of the government’s JRS which was specifically designed to deal with potential job losses caused by the coronavirus crisis.”
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