Ovo Energy has announced it will cut 2,600 jobs and close offices after the coronavirus lockdown accelerated the shift to online customer service.
The cull comes just four months after Ovo finalised its purchase of SSE’s retail arm and became the UK’s second-largest energy supplier, with five million accounts.
Ovo said lockdown restrictions had permanently altered energy customer behaviour, driving more to use online services and reducing the need for some roles. However, the company also suggested the cuts would have eventually happened regardless, as it folded SSE operations into its own.
Ovo founder Stephen Fitzpatrick 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.”
The job cuts will affect gas engineers, electricians, meter readers and call centre staff, 80% of them from SSE operations. At the time of the merger in January, Ovo employed 2,000 members of staff, while SSE’s force totalled 8,000.
Ovo will shutter offices in Glasgow, Selkirk and Reading, while locations in Perth, Cumbernauld and Cardiff will see their ranks thinned. 1,000 jobs will be lost in Scotland and approximately 1,400 in England and Wales.
Ovo had already furloughed 3,400 staff who were unable to perform their jobs due to social distancing rules, including meter readers and smart meter installers. The company said smart meter installations were down 92% since the lockdown began in March and home service engineering visits have fallen by 69%. It’s unknown how many of the job losses affect previously furloughed staff.
Before the merger, SSE had planned moved some call centre jobs to South Africa and the Philippines and intended to relocate another 700 positions. Ovo suspended the offshoring programme upon acquiring the company.
But unions said Ovo had betrayed its promise not to eliminate jobs following the SSE merger.
Justin Bowden, a senior organiser with the GMB union, 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.
“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.”
Unite’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.”
