Another day, another sweeping round of job cuts in the commodities sector — this time from British Gas’ parent company Centrica.
Centrica on Thursday announced a further 3,000 roles would be axed this year, on top of 2,000 already announced. The company, like many others, is struggling with the collapse in oil prices, which has bought wholesale gas prices down too.
As well as piping gas into our homes as British Gas, Centrica also has a gas exploration and production business and sells wholesale gas. The company took £1.8 billion in writedowns last year due to falling commodity prices.
The job cuts are part of a £750 million package of cost-cutting to be completed by 2020. £200 million-worth of budget cuts are expected this year alone. Centrica follows other oil giants Shell and BP in announcing cutbacks that include extensive job cuts. Centrica is also cutting capital expenditure by £500 million this year.
The measures were announced alongside Centrica’s 2015 results, which show it was a “challenging” year for the company. Here are the key points:
- Revenue down 5% to £28 billion;
- Adjusted operating profit down 12% to £1.4 billion;
- Statutory loss of £857 million.
British Gas, by far the biggest part of the business, saw a 4% fall in revenue to £12.4 billion as the company bowed to pressure and cut gas prices three times in the year.
Iain Conn, Centrica CEO, says in the statement:
Centrica has produced a resilient performance in 2015 and the actions we have taken leave us well positioned to handle the current environment, with sources and uses of cash flow more than balanced at current wholesale commodity prices. With a strategy developed around the customer, we have a clear purpose and direction. Implementation of the strategy is on track and I am pleased with the progress we have made to date.
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