British Gas owner Centrica on track to save around £100m thanks to restructuring and ‘fire and rehire’ scheme
- Centrica said 98% of British Gas engineers had agreed to sign new contracts
- Group said trading conditions have remained ‘tough’
- Business electricity demand dropped by 15% in first quarter
- The number of boilers that it installed in homes across the country dropped 11%
British Gas owner Centrica is on track to save around £100million thanks to its restructuring, including the controversial ‘firing and rehiring’ of thousands of its staff.
The group said that almost all its engineers had agreed to sign new employment contracts, which will require them to work an extra three hours a week for a total of 40 hours, and will not be paid more to work on weekends and public holidays.
Unions have claimed that under the new contracts, workers will suffer a 15 per cent pay cut, something which British Gas denies.
New contracts: Centrica said 98% of British Gas engineers had agreed to sign new contracts
Centrica chief executive, Chris O’Shea, told investors this morning: ‘The modernisation of our Group remains on track and the difficult, but necessary process to move colleagues onto new terms and conditions is now complete.
‘We are pleased that 98 per cent of UK colleagues have accepted the new contracts which will enable us to better serve the needs of our customers.’
It comes as in July, Centrica told more than 21,000 staff to accept new contracts or potentially lose their jobs, leading to dozens of strikes over the last year in a dispute over pay and conditions.
A month earlier, in June, the company had announced that it would slash 5,000 jobs.
British Gas profits tumbled 35 per cent to £80million last year as it lost another 164,000 customers and many of its business customers used less energy after shutting their offices due to the pandemic.
O’Shea said today that trading conditions for Centrica as a whole have remained ‘tough’ due to less demand for electricity as many offices remain closed and fewer boilers’ installations.
In the first three months of this year business electricity demand dropped by around 15 per cent, Centrica said.
And the number of boilers that it installed in homes across the country dropped 11 per cent compared with the same period last year.
‘As expected, trading conditions have remained tough in the year to date,’ O’Shea said.
But he added: ‘Although the external environment remains uncertain, our tight focus on cash and on fixing the basics across the group leaves us well placed as we continue the turnaround of our company.’
Centrica said it is not in a position to guess how its finances will look like this year due to the uncertainty caused by the pandemic.
It said that net debt dropped from £3billion to £500million between December and March, due to the nearly £3 billion sale of US subsidiary Direct Energy.
Shares fell 1.2 per cent to 57.18p by 11am on Monday morning.