He said the company had cut its prices twice this year and while profit margins were high in the first half they would be all but wiped out again in the second.
Advertisement
Centrica said the larger than expected increase was due to colder weather last winter compared with the previous year which drove an 11% increase in gas consumption.
The company said half of the job losses would go through redundancies.
But in the first six months of 2015, profits at British Gas’s residential arm rose to £528m up from £265m a year earlier. It’s why group profit fell 3% to £1 billion, although a lower tax rate flattered earnings per share (EPS).
Wholesale prices paid by gas and energy providers have plummeted over the last two years, customers generally not seen their bills decrease.
The bumper sum is expected to spark fury, coming weeks after the Competition and Markets Authority said suppliers were over charging customers by £1.2billion a year.
But Ann Robinson, director of consumer policy at uSwitch.com, claimed “sky-high bills” were also a factor.
The job cuts were announced by new Centrica chief executive Iain Conn. Up to £1 billion of E&P assets and wind farms will also be sold by 2017.
Instead, Centrica will exploit its competitive advantage afforded by “strong market shares, good brands, deep energy services capability and the ability to process a high volume of transactions at scale”.
According to the company, that will mean average savings of £72 a year.
Centrica has been conducting a review of the business “in light of significantly changed circumstances” and said after a “rigorous” analysis, it has concluded it must focus on meeting the needs of its customers and to deliver long-term shareholder value through both returns and growth.
British Gas customer numbers were broadly stable at 14.7million.
However, earlier this year it cut prices by just 5 per cent, raising serious questions about whether it could have gone further in easing the burden on struggling families.
The price of a barrel of Brent crude has slumped by more than half from almost 116 US dollars in June previous year.
Conn defended the British Gas results against immediate criticism from consumer groups. Its global workforce now stands at 94,000.
Advertisement
Unison general secretary Dave Prentis said: “The huge job cuts announcement at Centrica is a major blow for workers and raises questions about the potential impact on customer service”.
