SSE, one of the UK’s “Big Six” energy providers, is set to cut 444 jobs in its struggling retail business, blaming a series of factors including tough competition in the sector and the introduction of a cap on energy prices.
The FTSE 100 company, which has been trying to offload its electricity and gas supply business for some time, announced the voluntary redundancies on Wednesday, which will include employees in customer service and smart metering, saying it needed to increase efficiency in order to remain competitive.
“Like a number of suppliers, we are facing challenges due to competition increasing, the introduction of the energy price cap and higher operating costs,” said Tony Keeling, SSE chief operating officer and co-head of retail.
“To run a sustainable business, we need to become more efficient and ensure we have the right number of employees in the right locations to best serve our customers.”
The UK’s largest union, Unite, which has more than 4,000 members working at SSE, blamed the cuts on a lack of take-up by consumers of smart meters.
“Demand for smart meters to be fitted in households has not reached the levels expected by the company — hence the job losses announced by the SSE retail sector,” said Unite national officer for energy and utilities Peter McIntosh.
SSE insisted this was “not entirely accurate”, however. It said the reasons for the cuts were “broader” than this and noted they were are being made across both smart metering and customer service.
The government had set a target of having smart meters installed in every UK household by 2020, but the roll-out has been plagued by technological delays and escalating costs.
SSE’s electricity and gas supply business, like those of many of its competitors, has come under growing pressure in recent years. Increased competition in the retail market, following efforts by the regulator to make it easier for new suppliers to enter, has squeezed incumbents, while the introduction of a price cap on energy bills by the regulator has compounded matters for the major players.
This has prompted SSE to seek an exit and focus on its renewables and regulated networks businesses. It has been pushing to spin off the retail business, either as a standalone demerger and listing or through a sale.
Plans to offload it through a merger with rival Npower fell apart in December, however, when the companies failed to reach a deal to provide financial support to the new company.
SSE lost 460,000 energy customers between September 2017 and September 2018.