Ovo Energy is moving to cut a quarter of its entire workforce in an attempt to cut costs amid the growing industry crisis.
The UK’s third-biggest supplier of gas and electricity is expected to announce the loss of 1,700 roles out of 6,200 as part of a voluntary redundancy scheme as soon as Thursday. Gas market prices last month reached an all-time high of £4.50 per therm, about nine times higher than this time last year.
Earlier this week the company said it was “embarrassed” after an email was sent out advising customers to keep their heating bills low by “having a cuddle with your pets”, eating “hearty bowls of porridge” and “doing a few star jumps”.
The redundancy scheme, first reported by Sky News, will be announced alongside a pledge to increase minimum pay across the company to £12 an hour, and to “reshore” all customer-facing jobs to the UK.
It is also understood that Ovo is to open an academy in Glasgow as well as consolidate its sites to three locations in London, Bristol and Glasgow.
Record wholesale price increases for gas and electricity have prompted the government to look into ways of mitigating the effect on the cost of living in Britain.
Campaigners fear fuel poverty could reach its highest level since records began without government intervention, warning that 6 million UK homes may be unable to pay energy bills after a further price hike in spring.
Ovo, which has about 4.5 million UK customers, was set up by Stephen Fitzpatrick in 2009 and was acquired by SSE’s retail customer base two years ago.
It is the third-biggest energy firm behind Centrica’s British Gas and E.ON Next, the brand combining customers of E.ON and npower. It is also backed by the Japanese industrial group Mitsubishi.
Ovo declined to comment.