Ovo Energy is to axe 1,700 jobs, around a quarter of its workforce, as part of company-wide cost-cutting drive.
The loss-making energy firm, the UK’s third largest, told staff on Thursday that it was seeking to cut 1,700 roles from a total workforce of 6,200 through a voluntary redundancy programme.
The cuts are widely understood to relate to Ovo’s £500m acquisition of the household energy business of SSE in 2020, with fewer staff required as customers migrate from SSE’s systems to Ovo’s platform.
Ovo has yet to comment on the redundancy programme, which was first reported by Sky News.
But Unite, the union, said it would do “everything in our power” to defend members’ jobs. “We will not sit by and watch our members being made to pay the price of the pandemic,” general secretary Sharon Graham said.
The news comes just days after Ovo was widely criticised for providing customers with a series of tips to keep warm in winter without turning up the heating, including cuddling pets and doing star jumps. Founder Stephen Fitzpatrick later admitted the advice was “ridiculous”.
The energy price crisis has seen numerous new entrants collapse in recent months as wholesale prices soared. So far, the energy cap has prevented suppliers from passing on those heightened costs to customers, but that is expected to change in April when the current cap expires and household bills are likely to surge.
The transformational SSE deal saw revenues surge at Ovo, which was founded by Fitzpatrick, a former City trader, in 2009. Last October it reported annual revenues of £4.5bn compared to £1.4bn a year previously, although it posted a £141m loss on the back of higher acquisition and restructuring costs.
