OVO Energy has announced 2,600 redundancies, as COVID-19 puts pressure on the company’s integration of SSE Energy Services.
Since the acquisition of SSE Energy Services was completed in January, OVO has started integrating the two businesses, including the 8,000 members of staff it gained.
But as consumers have increasingly turned to digital services over the past couple of months due to the COVID-19 pandemic, “this has permanently reduced the demand for some functions and roles,” it said.
Since the implementation of lockdown in the UK, there has been a 69% drop in Home Service Engineering work and a 92% drop in Smart Meter installations for SSE Energy Services. Meanwhile, in April alone there was over a million online transactions.
This has pushed OVO and SSE to speed up their digitalisation strategy, and the following job losses. The company said these are mostly voluntary redundancies that will take place over the course of 2020.
Employees were made aware this morning, and OVO is in talks with trade unions and employee representatives
Stephen Fitzpatrick, CEO and founder of OVO said that “today is a very difficult day” and that the move was not a reflection of any of the “brilliant team’s” work.
“We are seeing a rapid increase in customers using digital channels to engage with us, and in our experience, once customers start to engage differently they do not go back. As a result, we are expecting a permanent reduction in demand for some roles, whilst other field-based roles are also heavily affected.
“There is never an easy time to announce redundancies and this is a particularly difficult decision to take. But like all businesses, we face a new reality and need to adapt quickly to enable us to better serve our customers and invest in a zero carbon future.”
Talks with trade unions had already produced an agreement on offshoring, OVO added. SSE Energy Services had begun an offshoring programme prior to its sale, but additional rounds have now been suspended to protect UK jobs.
Further to the redundancies, the Selkirk, Reading and Glasgow Waterloo Street office locations will be closed, with employees in those sites either relocated to another office or allowed to work from home.
The impact of COVID-19 on OVO had already been felt, with the furloughing of 3,400 staff in April.
OVO’s acquisition of SSE Energy Services made it the second biggest energy supplier in the UK, only outdone by British Gas.
Throughout 2020 it has been reorganising the beleaguered supplier, including appointing three new senior retail staff members to SSE Energy Services in January, with Bill Castell joining as chief financial officer, Charlotte Eaton as chief people officer and Raman Bhatia as chief operating officer.
In April, OVO Energy revealed the creation of a new OVO Energy Board to accommodate SSE Energy Services, which is being headed up by Stacey Cartwright.