Ovo Energy is to cut 2,600 jobs this year, citing the coronavirus pandemic as pushing more customers online and reducing demand for some roles.
The GMB union has accused the company of a “betrayal of promises” made to workers when it completed the acquisition of SSE’s retail arm at the start of the year.
Ovo said employees had been informed this morning that a voluntary redundancy programme was being launched. However, it had already emerged last night that 215 jobs were to go as part of the accelerated integration of its Home Services division with SSE’s.
The merging of Ovo and SSE’s lettings business, metering, commercial efforts and support functions will also be fast-tracked.
As an example of the rapid shift towards online tools, Ovo said that in April it had seen over one million online transactions. At the same time it cited a 69 per cent drop in home service engineering work and a 92 per cent reduction in smart meter installations.
Ovo said as part of an ongoing dialogue with unions it had agreed to suspend the offshoring programme which SSE Energy Services had started and which would have seen 700 roles move to South Africa.
Chief executive Stephen Fitzpatrick described it as a “difficult day”, adding: “We have a brilliant team here and this news isn’t a reflection of anyone’s work. 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.
“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.”
Ovo said that as well as fast-tracking the integration plan, it would be digitising legacy SSE processes.
As part of a move towards more flexible working the Selkirk, Reading and Glasgow Waterloo Street office locations will be closed. The employees in these sites will be able to either work from home or at an alternative office.
At the start of April, Ovo announced it was furloughing 3,400 staff, more than a third of its workforce, because of the impact of the coronavirus pandemic. The affected posts were largely those involved with working in customers’ homes, such as smart meter installers or meter readers.
The GMB union said Ovo’s actions proved that any company accessing the Job Retention Scheme should be banned from making redundancies for at least a year.
Justin Bowden, 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.
“The crisis and the SVT cap have affected the whole energy retail market but you cannot just cut your way out of a crisis in search of profit.
“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.”
Gerry Crawley, Unison regional organiser: “Any job loss at this time is deeply regrettable but UNISON will continue to work with SSE/OVO to try and ensure that any job losses are through a voluntary redundancy process. UNISON welcomes the fact that, through early engagement, 700 jobs that were going to be offshored to South Africa, will now be maintained within the UK.”
Ovo completed the acquisition of SSE’s retail arm in January in a £500 million deal which made it one of the largest players in the market, now serving almost 5 million customers.