A trade union has warned energy giant Centrica that it “can’t cut its way out of a crisis” as it looks to slash jobs and make £250 million in efficiencies on the back of poor half-year financial results.
The boss of British Gas owner Centrica also announced his intention to exit his chief executive role next year, amid a dramatic overhaul of the company’s strategy.
The group confirmed Iain Conn’s departure alongside an announcement that it would exit the production of oil and gas as it targets further cost savings.
Shares in the firm dropped more than 10% in early trading as it revealed a near-60% cut to the interim dividend.
GMB Union warned last night that Centrica was in the “last chance saloon”.
The firm lost 742,000 customers last year and announced 4,000 staff cuts.
While profits took a hammering, Mr Conn accepted a 44% pay rise, taking his salary to £2.4m a year.
Justin Bowden, GMB national secretary, said: “Centrica’s calamitous financial results come as no surprise to GMB and the announcement to cut another £250m and slash yet more jobs is not the answer – you cannot just cut your way out of crisis.
“Neither is the solution secretly touting Centrica’s wares in some sort of middle and far eastern bring and buy sale.
“You have to have a plan, you have to grow.”
Centrica said it would rebase its dividend due to the “challenging environment” in the first half of the year.
The interim dividend was slashed by more than half to 1.5p per share, while the full-year expected dividend was rebased to 5p per share.
Accounts showed the company swung to a statutory pre-tax loss of £446 million in the six months to June 30, compared with a £704 million profit this time last year.
Adjusted revenue dropped 2% to £13.8 billion, while underlying earnings fell 19% to £1.08 billion.
Mr Bowden added: “British Gas is a household name with the competitive advantage that that should bring. There is a brilliant workforce who are desperate for a future and are hurting.
“More of the same – more job cuts on top of the thousands already gone and going – are panic measures not a credible plan for recovery.
“There must be a pause under a new CEO, investment and a new plan for growth.”