Ovo Energy to cut thousands of jobs following acquisition of SSE retail business

The UK’s second biggest energy supplier said the coronavirus pandemic had ”accelerated changing consumer behaviour" and “permanently reduced the demand for some functions and roles”

SSE PLC - Ovo Energy plans to cut thousands of jobs following acquisition of SSE retail business

Ovo Energy, the Bristol-based energy supplier, is planning to cut around 2,600 jobs after acquiring the retail business of SSE PLC (LON:SSE) for £500mln in January.

On Tuesday, the UK’s second biggest energy supplier said the coronavirus pandemic had ”accelerated changing consumer behaviour” with more of its customers going online and using its digital tools.

READ: SSE completes retail business sale to OVO

Ovo said this had “permanently reduced the demand for some functions and roles”, adding that the job losses will be made largely through voluntary redundancies over the course of 2020.

The firm is planning to close its offices in Selkirk, Reading and Glasgow Waterloo Street as part of the cutbacks.

Gas engineers, electricians, meter readers, and call centre staff are also expected to be affected as Ovo said the pandemic had resulted in a 69% drop in home service engineering work and a 92% reduction in Smart Meter installations in April. Meter reading had also ground to a complete halt in March.

Ovo added that it has decided to suspend an additional round of planned offshoring activity to minimise UK job losses.

“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”, said Ovo founder and chief executive Stephen Fitzpatrick.

“There is never an easy time to announce redundancies and this is a particularly difficult decision to take. But like all businesses, we face a new reality and need to adapt quickly to enable us to better serve our customers and invest in a zero carbon future”, he added.

Trade union GMB criticised the move on Tuesday, saying that Ovo had “backtracked” on its promise not to cut any jobs following the acquisition of the business from SSE.

The union is also pressuring the government to amend the furlough scheme to ensure that companies who take government money from the Job Retention Scheme (JRS) are prevented from immediately making redundancies for at least year.

“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”, said GMB national secretary Justin Bowden.

“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”, he added.

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