Centrica, the group that owns British Gas, has said that it will be cutting around 3,000 jobs this year in order to reduce costs.
These cuts will mean that the company will reach about half of the job reductions that it had planned to make by 2020; it has already cut 800 this year. It is understood that around 5,000 of the job cuts will be made in the UK and the rest will be made in North America.
The company made the announcement as it prepared for a grilling over how much it’s paying its board members, and its record on its environmental efforts, at its AGM (annual general meeting) on Monday.
Centrica is the biggest company to hold its annual general meetings since the rebellions at Smith & Nephew and BP last Thursday. The firm has already faced criticism because of the £3m pay package for Iain Conn, the chief executive.
The pay deal for Conn drew criticism from fuel poverty campaigners, who pointed out that the company had already been reprimanded by the CMA (Competition and Markets Authority) for overcharging customers.
The pay that Conn received was for a year in which profits fell by 12% to £1.5bn. The 2015 AGM saw only 67% of shareholders vote in favour of the renumeration report.
The firm’s most recent trading update revealed that the number of residential energy contracts held by British Gas has fallen by 224,000 in Q1 of 2016, taking the total number of contracts to million. This amounts to a 1.5% fall in 2016 so far- more than the 1% drop seen over the entirety of 2015.
Environmental campaigners will be asking Centrica, which holds around 40% of UK gas accounts through British Gas, about what the firm plans to do in order to help customers reduce their CO2 emissions.
A director at Hermes Equity Ownership Services, Bruce Duguid, is planning on asking Centrica about the measures it will take in order to achieve an A grade for its carbon disclosure project- the company got a B last year.
Duguid has two questions prepared:
“Given that 90% of carbon emissions associated with Centrica occur at its customers and not within the company itself, will Centrica consider setting ambitious carbon reduction targets for its customers in addition to those for its power generated?”
“And secondly, will Centrica seek to regain the coveted ‘A’ grade from the carbon disclosure project?”
Hermes is part of a collection of investors known as the “Aiming for A” group, they have said that the method used in the carbon disclosure project did not fully take into account the reduction achieved by Centrica’s customers.
Centrica said that its UK business has turned a profit in Q1 of 2016 and is set to cut costs by £750m by 2020.
Conn said:
“We continue to make good progress in implementing our strategy, and with improving levels of customer service, good operational performance, lower costs, and the launch of new products to help customers manage their energy usage, we remain on track to deliver against our 2016 targets.”
