LONDON, United Kingdom. The former BP executive and new boss leading the company behind British Gas’ Centrica, Ian Conn has ordered to cut 6,000 jobs despite a 50% increase in profits in the first half of the year.
The move comes following a 6-month review carried out by Conn while there was a 3% decrease at £1 billion in the profits for the year however the profits made by British Gas had doubled.
The jobs cuts are seen to be part of a wider move to reduce annual spending by £750m in the next five years. The plan will also force a 50% decrease in production and will see 80million barrels of oil equivalents reduced to between 40m and 50m.
Chief executive of Centrica has expressed future plans to create 2,000 new jobs in the energy services department that could help reduce the overall scale of redundancies before the end of 2017.
“Alongside a major group-wide efficiency program, this (new strategy) will underpin long-term shareholder value, as we target operating cash flow growth of 3-5% per year and deliver a progressive dividend policy,” Conn said.
The company has recently admitted that it has a small interest in the UK onshore shale exploration and said foreign assets in countries around the world, including
Trinidad are more likely to be sold off than the North Sea fields.
Richard Lloyd, the executive director of Which? said :“While it’s good to see the new commitment from Centrica to focus on serving customers, with British Gas profits high and wholesale prices low, customers will no doubt wonder why cuts to their bills haven’t gone further, and haven’t included electricity, “ said
However, an analyst identified some risks in the new strategy. He said, “The plan carries significant execution risk particularly around the ambitious cost-saving program, planned investment in new areas including “connected home” technologies and distributed generation and potential asset sales. But overall we see it as providing a foundation for improving credit quality”.
Credit: PressTV
