Marcus Evans Group | Worldwide Headquarters | American Offices | Latin America | European Offices | African / Asian Offices

E.ON cuts 500 jobs after putting its bills up

German-owned E.ON blames cuts on sale of distribution unit and need to keep overheads low

One of the country’s largest energy companies, E.ON, is to axe 500 jobs barely a week after increasing gas prices by 18% and electricity bills by 11%.

The German-owned group blamed the cuts on the sale of its distribution business and a need to keep overheads low to benefit customers. But industry experts said E.ON had also switched a lot of work back to its head office in Düsseldorf.

Paul Golby, chief executive of E.ON in Britain, said: “We had to undertake a deep and rigorous review of how much money we spend in order to ensure we keep costs as low as possible for our customers, become a more agile organisation and build a sustainable business in the UK.

“While I’m very aware that this will be a difficult time for our colleagues, it is our aim to keep uncertainty to a minimum and to achieve these redundancies by voluntary means,” he added.

The company recently sold off its Central Networks operation for £3.5bn to an American competitor, Pennsylvania Power & Light, which controls the wires and pylons in south-west England and south Wales. The deal has encouraged E.ON to cut out staff duplication in its remaining Coventry and Nottingham offices. Most of the jobs being lost are in the human resources, communications and legal services departments.

Mike Jeram, national officer at the Unison union, which represents workers at E.ON, said: “This is a devastating blow. We will work with the company to get the best deal for our members.”

Emily Boase, national secretary of the Prospect union, questioned whether all the job cuts were necessary but accepted that the E.ON group faced tough times.

“While the loss of any jobs is regrettable, we welcome the commitment from chief executive Paul Golby to work closely with the unions and seek to achieve these redundancies through voluntary means wherever possible,” she said.

The German parent group recently announced its first ever quarterly financial loss and unveiled up to 11,000 job losses, blaming the Berlin government’s decision to force the closure of all nuclear plants there.

Last year E.ON UK announced the closure of its Rayleigh customer service centre with the loss of 600 jobs and admits that it has cut as many as 7,000 positions of the original 17,000 it employed in Britain when it first bought PowerGen and then East Midlands Electricity over the last decade. © 2011 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds