Centrica to cut 4,000 jobs amidst shrinking profits

British multinational utility company Centrica is planning to cut around 4,000 jobs by 2020 in the wake of declining operating profits.

The move is part of an extended cost-cutting programme, through which the company intends to achieve savings of £1.25bn per annum by 2020.

So far the cost efficiency measures delivered savings of £750m per year.

The company’s operating profit for last year fell 17% to £1.25bn, largely owing to a proposed cap on gas tariffs in the UK as stated in the drafted bill published by the government last year.

In addition warmer climate also contributed to the drop in profits.

Centrica group chief executive Iain Conn said: “Our financial result in the second half of 2017 was weak, primarily reflecting poor performance in Business energy supply and particularly in our North America Business unit.

“The combination of political and regulatory intervention in the UK energy market, concerns over the loss of energy customers in the UK, and the performance issue in North America have created material uncertainty around Centrica and, although we delivered on our financial targets for the year, this resulted in a very poor shareholder experience.”

The company noted that focus will be on performance delivery and financial discipline, as well as providing improved service and new propositions for its customers.

The savings will be achieved through digitisation initiatives, application of field technology, as well as simplification of Centrica’s core business processes.

Alongside the job losses, around 1,000 additional roles are expected to be created between this year and 2020.

Centrica noted that total energy customer account holdings of its subsidiary British Gas, which caters to domestic residential and business customers, declined by 1.3 million, or 10%, during last year.

However, the energy supply profits of British Gas increased by 3% to £572m.

Apart from the UK, the company operates in Ireland and North America.