UK-based Centrica plans to reduce its workforce by 3000 by year-end, and a total of 6000 by 2020 in a move that will save the company more than US$1.1 billion (£750 million).
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Image of Iain Conn. From Centrica. |
Centrica suffered a net loss of nearly $1.3 billion in 2015, a slight improvement from 2014’s net loss of $1.4 billion. Its revenue also fell about 5% to $401 billion, from $421 billion year-on-year.
“The £750 million ($1.1 billion) program is now underpinned in our business plans. We remain on track to achieve the savings and have already made a number of restructuring announcements across the group, which will result in the reduction of around 2000 roles,” Centrica chief executive Iain Conn said. “We expect to achieve a reduction in direct headcount of around 3000 by the end of 2016.”
The 6000 workforce reductions by 2020 will be comprised of half redundancy, and half from natural attrition, the company said.
In its cost efficiency program, Centrica expects to deliver some $287 million of annualized savings this year, and about $716 million by 2018.
“The lower commodity price environment will inevitably continue to have an impact on the earnings and operating cash flow from our E&P and central power generation businesses. However, with our focus on cash flow growth and delivery of our £750 million cost efficiency program, we currently expect to deliver adjusted operating cash flow in excess of £2 billion in 2016,” Conn said.
The company’s exploration and production budget this year stands at some $716 million, however, should oil and gas prices not recover, there could be further reductions in its capex.
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