As Centrica, the owner of British Gas, has announced plans to cut 5,000 jobs, Professor David Elmes of Warwick Business School and Professor Mike Waterson of the Department of Economics comment on the factors that may have led the company to this decision.
Professor Mike Waterson of the Department of Economics said: “British Gas has been losing revenue as a result of long-term decline in market share of the UK retail market and has also faced declining wholesale prices more recently. It therefore needs to rethink the overall size of its operation.”
“When the Chief Financial Officer becomes the CEO, you can expect a hard look at the numbers but today’s news from Centrica’s Chris O'Shea looks like a clear out of ideas as well.” Comments Professor David Elmes of Warwick Business School. “Under Centrica’s last CEO, the company had sought to take a major role in the energy transition that’s underway. Not just the shift to lower carbon energy but the smarter use of energy in our homes, as we use more electric vehicles and as we shift the balance between the large, centralised power and more local energy systems.”
Centrica’s previous CEO, Iain Conn, had an ambitious plan to shift the company from supply to services but the new businesses took longer to take off than had been hoped.
“These job cuts will be tragic news for the staff involved at an uncertain time. The emphasis on management roles suggests the company will pull back from its broad agenda of leading the UK’s energy transition to a more sustainable future. What parts it will focus on remains to be announced.”
11 June 2020
Media Relations Manager (Warwick Medical School and Department of Physics)
Mob: +44 (0) 7824 540863