British Gas owner Centrica to cut 1,300 jobs, flags slower trading arm growth
Centrica Announces Job Cuts and Trading Arm Slowdown
By Raechel Thankam Job and Anushka Chourasia
Job Reductions and Impact on Workforce
July 23 (Reuters) - Centrica plans to shed about 1,300 jobs, the British Gas owner said on Thursday after reporting that market volatility, asset disposals and adverse weather had weighed on profit, knocking its shares as much as 10% lower.
Details of Job Cuts
The job cuts, some of which have already been completed, include a proposed reduction of about 500 staff in customer operations and fewer outsourced offshore positions.
Strategic Focus and Asset Disposals
Centrica, which has been selling non-core assets and concentrating on LNG-related infrastructure to boost margins, also warned of growth stagnating at its energy trading arm.
It is facing other challenges including hot weather in Britain and Iran war-linked disruptions to energy markets.
Investment in Technology and AI
Centrica has been increasing investment in AI and technology upgrades as it seeks to simplify its operations, and had previously alluded to headcount reductions.
"AI isn't driving these particular job reductions; that's mainly due to changing customer behaviour," Centrica CEO Chris O'Shea told reporters after Thursday's results.
Softer Energy Trading Outlook
SOFTER ENERGY TRADING OUTLOOK
Profit Decline and Market Volatility
Centrica's first-half adjusted core profit dropped 18% to £737 million, mainly due to the impact of Spirit Energy asset disposals and production outages.
"Volatility across energy markets has created challenges in some parts of our business, and some of our delivery has been slower than we would like," O'Shea said.
Trading Arm Growth Forecast
Centrica warned that core profit for next year at its optimisation division, the major contributor to its trading arm Centrica Energy, would be in line with expectations for 2026, which currently stand at around £250 million.
That would be much lower than the £300 million to £400 million medium-term target for Centrica Energy, as it aims for £2 billion overall by 2030.
Government Intervention and Energy Security
Centrica said it has sought government intervention to keep Britain's largest gas storage facility in Rough open and to help the country's efforts on energy security endeavours.
"We've spent the last few years eking out this asset to preserve the option, but we're really coming to the end of the road now," O'Shea said, adding that Centrica does not intend to renew its operating licence which expires in April.
($1 = £0.7475)
(Reporting by Raechel Thankam Job, Anushka Chourasia and Ankita Bora in Bengaluru; Editing by Sonia Cheema, Kate Mayberry and Alexander Smith)