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British Gas cuts 6000 jobs as profits double

By Energy Company Numbers on August 1, 2015 in Uncategorized
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Yes, you read that right. British Gas really has cut 6000 jobs after doubling its profits. The energy giant announced 6000 job posts will be cut across the group starting from now, and that equates to roughly 10% of the overall British Gas workforce.

The cuts follow a strategic review of the company where it was decided that savings needed to be made over 5 years. British Gas estimates that cutting 6000 job posts will save them £750 million a year. The job cuts are not expected to be UK-only, and half of them are expected to be through redundancies (where people get a pay-out). So this isn’t an all-out cull, but it is a surprise move given British Gas’s performance. British Gas profits were £528 million for the first half of this year, which is more than the company made in the whole of 2014. But don’t be fooled into thinking that this steep rise in profits is down to slick marketing or better products than the competition – this year has been colder than 2014 so far, so more energy has been used as a result. British Gas estimates that 11% more energy has been used this year compared to last year.

So where does this leave us consumers? That’s yet to be established. The Competition and Markets Authority found that energy prices are too high last month and that household bills should be lower than they are. All of the big six were mentioned in the CMA’s report, and there’s no doubt that with the news that British Gas has doubled its profits, consumers will start to question why cuts to their bills haven’t gone further. So why haven’t they? The simple answer is a lack of pressure. Although consumer groups and the CMA have actively questioned the energy market’s stance on prices, little action has been taken. And Amber Rudd urging the big six to lower their energy prices hasn’t achieved much, although it did improve her public perception.

So what’s next for British Gas? Probably more record-breaking profits, truth be told, at the expense of more of its workforce. It’s shrewd business, but not very ethical.

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Energy Company NumbersView all posts by Energy Company Numbers
Energy Company Numbers is a telephone number directory service dedicated to helping UK consumers keep in touch with their energy suppliers.

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