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OVO Energy reportedly to cut 1,700 jobs

Stephen Fitzpatrick, CEO and founder of OVO. Image: OVO.

Stephen Fitzpatrick, CEO and founder of OVO. Image: OVO.

OVO Energy is reportedly to cut a quarter of its 6,200-strong workforce amid the continued volatility in the energy supply market.

Sky News yesterday (12 January) reported that the plans could be announced by OVO Energy as soon as today, with these job loses expected to be past as a voluntary redundancy programme.

The restructuring would be aimed at saving costs in the face of the current energy crisis, Sky News reported, although it also reported a potential pay increase for remaining employees.

Current± today asked OVO Energy whether it could confirm the job cuts, however the company declined to comment.

It follows OVO Energy announcing 2,600 redundancies in May 2020 as a result of the combination of the impact of COVID-19 alongside its integration of SSE Energy Services, having acquired the supplier in January of that year. This came a month after it furloughed 3,400 staff due to the pandemic.

The last year has been particularly challenging for energy suppliers, with 27 collapsing in 2021. Of these, 25 went under after gas prices began to spike in August.

Meanwhile, green energy supplier Good Energy recently issued a profit warning, citing the "stratospheric price levels" in the market.

It's expected that the price cap will be raised later this year as a result of the pressure currently placed on energy suppliers. Alongside the high wholesale prices, energy suppliers are also facing additional costs from the Supplier of Last Resort scheme, whereby energy suppliers take on the customers of failed suppliers.

As such, Cornwall Insight is expecting that the price cap will rise by 46% to around £1,865.

Meanwhile, Ofgem has set out a raft of new measures to ensure the financial stability of suppliers, including financial stress testing as well as a requirement for supplier boards to undertake self-assessments of their management control frameworks and provide assurance to Ofgem.

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