By Noor Zainab Hussain and Susanna Twidale
(Reuters) – SSE said on Wednesday it would cut jobs in its customer service and metering teams as the British energy company faces a perfect storm of stiff competition, higher costs and a cap on how much it can charge.
Britain and Ireland’s largest trade union Unite said SSE would cut 444 jobs, or around 5 percent of employees, in its retail business, blaming a lack of interest from customers for the smart meter devices that could help cut energy emissions.
Britain has a goal to roll out around 50 million smart meters to almost 30 million homes by the end of 2020.
However, customers have been put off by early teething problems and issues with some of the first meters’ inability to function if households switched suppliers.
SSE said it was offering voluntary redundancy, without specifying how many jobs would be lost.
“Like a number of suppliers, we are facing challenges due to competition increasing, the introduction of the energy price cap and higher operating costs,” Chief Operating Officer and Co-Head of Retail, at SSE Energy Services Tony Keeling, said.
He added that in order to run a sustainable business the company needed to become more efficient.
SSE’s shares were 2.4 percent lower at 1,128 pence at 1343 GMT.
Britain’s energy regulator Ofgem was told by parliament last year to cap energy prices after lawmakers said customers were being overcharged for electricity and gas. Prime Minister Theresa May had called the tariffs a “rip-off”.
However, Ofgem gave the green light to suppliers to increase bills by more than 10 percent from April 1 after a rise in wholesale energy prices.
SSE is not the only one of Britain’s big six energy suppliers — which also include Centrica’s British Gas, Iberdrola’s Scottish Power, Innogy’s npower, and EDF Energy — to announce job cuts.
Innogy said earlier this year it would cut 900 jobs, or around 14 percent of its workforce at npower, due to the tough market, while Centrica said in early 2018 it would cut 4,000 jobs by 2020 to reduce costs.
Unite, which has more than 4,000 members in SSE’s 20,000 strong workforce, said it had been working with the company to avoid job cuts over the last six months but the take up of new meters had not improved.
“Today’s announcement by SSE Retail is disappointing, but not unexpected. Unite will oppose any attempts by the company to introduce compulsory redundancies,” Unite’s national officer for energy and utilities Peter McIntosh, said.
The government hopes smart meters will encourage people to use less electricity, contributing to efforts to reduce greenhouse gas emissions and meet climate targets.
(Reporting by Noor Zainab Hussain in Bengaluru and Susanna Twidale in London; Additional reporting by Clara Denina and Sabina Zawadzki in London; Editing by Bernard Orr and Kirsten Donovan)