Setback after merger
Ovo Energy accused of betrayal after axeing 2,600 jobs
Switched off: employees feel they have been let down
Ovo Energy, a challenger to the big six, is to cut 2,600 jobs this year – a third of its workforce – just months after acquiring the household business of Perth-based SSE.
Jobs at a call centre in the city will affected and the Selkirk, Reading and Glasgow Waterloo Street office locations will be closed.
Employees in these sites will be able to either work from home or at an alternative office.
The company said the coronavirus pandemic had seen the need to switch more customers online.
But the GMB union has accused the company of a “betrayal of promises” made to workers when it completed the acquisition SSE’s retail arm at the start of the year.
Ovo said employees had been told yesterday 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.
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 “sad 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.
This is a massive betrayal of promises made to workers and politicians– Justin Bowden, GMB
It has furloughed 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 showed why 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.
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 five million customers.
Gary Smith, Scottish secretary at the GMB, said: “In January, when the Ovo Group took over SSE’s customer service, directors said they knew there was a better way to sell energy.
“But instead of them turning out as saviours, if they are slashing all these jobs they will look like asset strippers.
“The lowest paid workers in the industry are now paying the price of failed privatisation, their futures held to ransom now by its casino economics.”
Ovo was established a decade ago but has grown under the leadership of former banker and Tory donor Stephen Fitzpatrick.