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Ovo Energy to cut 2,600 jobs after SSE merger

UK’s second biggest energy supplier says lockdown has pushed customer services online

Ovo Energy, Britain’s second biggest energy supplier, is to cut 2,600 jobs and close offices as the coronavirus 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 readersand 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.

About 80% of the cuts will come from the SSE business. The company expects about 1,000 jobs will be lost in Scotland and approximately 1,400 in Wales and England.

The GMB union accused Ovo of betrayal, saying it had promised 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 denied it had made any assurances around jobs, and said the cuts would be made largely through voluntary redundancy over the course of this year.

Stephen Fitzpatrick, the former banker and Conservative 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. The company has furloughed 3,400 staff who were unable to do their jobs because of the pandemic, including meter readers.

Before the acquisition, SSE had moved some call centre jobs to South Africa and the Philippines and had planned to move a further 700 roles to South Africa, but Ovo has suspended the offshoring programme.

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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