Workforce blow

Ovo Energy shuts Scottish offices in jobs cull

Founder: Stephen Fitzpatrick

Ovo Energy is closing its 700-employee Perth office and others in Scotland as the gas and electricity provider cuts a quarter of its workforce.

Staff have been told that between 1,700 and 2,000 employees across the UK will lose their jobs through voluntary redundancy.

Two bases in Edinburgh, one in Cumbernauld and another in Dunfermline will also close as it reduces its UK offices from 10 to three in Glasgow, Bristol and London.

It will open a training academy in Glasgow and is expected to say that it will increase minimum pay to £12 an hour.

Britain’s third-biggest energy supplier says it needs fewer staff following the transfer of millions of customers and 8,000 employees acquired in a £500m deal for SSE’s energy supply business, announced in September 2019.

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The news is a further blow for Perth following the decision to base the merged transport companies Stagecoach and National Express in Birmingham.

Deputy First Minister John Swinney, who is also the local MSP, and the Perth and North Perthshire MP Pete Wishart are seeking talks with Ovo’s management.

The latest round of job cuts may also raise questions about Ovo’s financial strength at a time when many energy firms have collapsed in the face of soaring wholesale gas prices.

The group reported a pre-tax loss of £176 million on revenues of £4.5 billion in 2020, and is understood to be seeking to raise more funds.

Ovo controversially announced 2,600 job cuts in May 2020 and closed offices in Selkirk, Reading and Glasgow.

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The company, which supplies 4.5 million households under brands including Ovo Energy and SSE, now employs about 6,200.

Union chiefs accused management of precipitating the crisis by “blundering and plundering” the company in recent years.

When OVO took over the retail base of SSE it transformed OVO’s annual turnover by £3 billion, from £1.45 billion to £4.46 billion. Unite warned at the time that the move was a huge risk which could jeopardise OVO’s future.

Responding to today’s announcement, Unite general secretary Sharon Graham said: “We will do everything in our power to defend our members’ jobs.

“All and every option will be on the table. As a first step the company must now open the books to union experts. We will not sit by and watch our members being made to pay the price of the pandemic.”

In the last five years Unite estimates that the top directors of OVO took £4.6 million out of the company in salaries and benefits. Not named in the accounts, but the best paid director, likely to be the CEO Stephen Fitzpatrick, earned almost half that figure.

Unite national officer for energy, Simon Coop, said:“We warned the directors about blundering into the SSE takeover. In recent years the same directors have plundered the accounts for amounts estimated to be touching £6 million.

“So, the company must be subject to severe scrutiny before the union decides on our next moves, but if they move to compulsory redundancies they will be fully opposed by the union.”

The job cuts follow the firm’s apology for sending out an email to SSE customers with energy-saving tips that included cuddling their pets and doing star-jumps to stay warm.

Ovo was founded in 2009 by Mr Fitzpatrick who remains its controlling shareholder and is now a billionaire on paper through his stake in Ovo and in Vertical Aerospace, a flying taxi venture.

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