Britain’s third-biggest energy supplier, which sparked fury after recommending that households save on their heating bills this winter by ‘cuddling’ their pets, is said to be cutting a quarter of its workforce amid a deepening gas crisis.
Ovo Energy will reportedly be axing roughly 1,700 out of 6,200 roles as part of a voluntary redundancy programme in a bid to save costs.
The energy firm is said to have plans to close several sites across the country in order to focus on London, Glasgow and Bristol, but it will open a new academy in Glasgow, a source told Sky News.
Ovo’s announcement will also include a promise to increase minimum pay across the company to £12-an-hour as well as ‘reshoring’ all customer-facing jobs to the UK, the source said.
The development comes during a difficult week for Ovo, after the company was criticised for sending an email to its customers recommending that they can save on their heating bills this winter by ‘cuddling’ their pets , ‘cleaning’, or ‘doing a few star jumps’.
Ovo Energy sent an email to customers on Monday listing ten ‘simple and cost effective ways to keep warm this winter’. They included having a ‘cuddle with your pets and loved ones to help stay cosy’, eating ‘hearty bowls of porridge’, sticking to ‘non-alcoholic drinks’ and eating ginger — but not chilli, ‘as it makes you sweat’
Ovo Energy sent an email to customers on Monday listing ten ‘simple and cost effective ways to keep warm this winter’
Stephen Fitzpatrick, the £675million boss of the energy supplier, later apologised for the email and declared: ‘Somebody had a bad day’.
Mr Fitzpatrick did not reveal if the person who wrote the email had been sacked but admitted their suggestions had been ‘upsetting and embarrassing’.
Energy bills for millions of households are expected to jump by more than 50 pet cent in April to £2,000 a year, when Britain’s energy price cap is adjusted.
MailOnline revealed earlier this week that Mr Fitzpatrick enjoys a sprawling, five-bedroom weekend home in the heart of the picturesque Cotswolds, close to Cirencester, which is worth £3.2million and costs a whopping £850-per-month to power.
Mr Fitzpatrick bought the former rectory, which boasts a swimming pool, six bedrooms and four bathrooms, for £2.9million in 2019.
His business is in the firing line after offering ‘simple and cost effective ways’ to help keep its customers warm through winter, other than putting the heating on, including giving a cat ‘a cuddle’, eating ‘hearty bowls of porridge’ and sticking to ‘non-alcoholic drinks’.
Other suggestions in the email, sent out to customers of SSE Energy Services, a gas and electricity retail business which was acquired by Ovo in 2020, suggested eating ginger – but not chilli, ‘as it makes you sweat’. Or trying ‘cleaning the house’, having a family ‘hula-hoop contest’ or ‘doing a few star jumps’.
Belfast-born Mr Fitzpatrick told the BBC: ‘I’d like to start by apologising, again. It is unfortunately the case that we are a large company and somebody had a bad day, they sent out an email and we should have caught it. It is an email that should never have been written.
‘I think it was probably meant with good intentions but this is the kind of email that causes a lot of upset. Nobody takes the situation facing British customers more seriously than I do so it’s really upsetting and embarrassing’.
When asked if he was worried that the company’s reputation had been badly hurt, he said: ‘I hope that the British public will understand that not everybody gets it right all the time’
‘We have spent five or six years investing tens of millions of pounds on technologies that can help customers lower their carbon footprint, save energy and save money so it’s really ironic that we’re also the company sending out these ridiculous emails advising people to eat porridge and not drink wine. It’s just embarrassing and I hope that we have been emphatic with how we have dealt with this’.
Stephen Fitzpatrick founded Ovo Energy in 2009 and admits the email sent to customers was humiliating for the business that has made him £675million
Ovo Energy boss Stephen Fitzpatrick owns this sprawling, five-bedroom home in the Cotswolds that has its own swimming pool and is now worth in the region of £3.2million
Which energy suppliers have gone bust so far
- Entice Energy
- Orbit Energy Limited
- Neon Energy Limited
- Social Energy Supply Ltd
- CNG Energy
- Omni Energy Limited
- MA Energy Limited
- Zebra Power Limited
- Ampoweruk Ltd
- Bluegreen Energy Services Limited
- GOTO Energy Limited
- Daligas Limited
- Pure Planet
- Colorado Energy
- Igloo Energy
- Symbio Energy
- Avro Energy
- Green Supplier Limited
- Utility Point
- People’s Energy
- PFP Energy
- MoneyPlus Energy
Mr Fitzpatrick, who was dubbed a disruptor to the UK energy market when he founded Ovo in 2009, which has made him one of the nation’s richest people.
MPs slammed his company’s advice as ‘insulting’ and ‘offensive’ as Britons face a crushing cost-of-living crisis with one Government figure describing the suggestion to eat porridge and cut out alcohol as ‘like some Dickensian nightmare’.
The email was sent to customers of SSE Energy Services, which was bought by Ovo in 2020.
It comes as energy bills for millions of households are set to soar by more than 50 per cent in April.
Rishi Sunak is under growing pressure among Tory backbenchers to tackle the energy crisis after Boris Johnson said he is ‘constantly’ meeting with the Chancellor to discuss rising energy bills.
Charities have warned that the energy price surge could plunge millions more households into ‘fuel poverty’.
It comes as official figures suggested that inflation could soar to its highest level in more than 30 years in 2022 should ministers choose not to place any controls on increasing energy bills in April.
Government projections are understood to be warning that steep rises to consumers’s energy costs could see inflation rise by a further two percentage points come spring.
Financial services company Goldman Sachs provided a similarly damning picture as they warned hiking up fuel bills could see inflation hitting 6.8 per cent in April.
Experts have warned the latest squeeze could be even worse than the credit crunch 14 years ago, thanks to a toxic combination of spiking prices, the looming national insurance hike, and over a million people being dragged into the higher rate of tax.
Britain privatised British Gas in 1986 and, after a series of deregulating steps since then, the consumer market has seen a plethora of different companies – some essentially just traders – offering gas and electricity to households.
Many of those companies have now gone bust, caught between a government imposed price cap, which limits what companies can charge consumers, and the wholesale natural gas price. The next review of the price cap is to be announced on Feb. 7.
It comes after industry bosses warned a taxpayer-backed support package for energy-intensive businesses hit by the surge may be just a ‘flimsy sticking plaster’.
Boris Johnson is reportedly backing a plan being developed by Business Secretary Kwasi Kwarteng for state loans to firms threatened with closure over the winter.
Energy bills crisis Q&A
How much do green taxes add to bills?
Latest figures from energy watchdog Ofgem show that 25.48 per cent of electricity bills in August 2021 went on ‘environmental and social obligation costs’. On gas bills it was just 2.46 per cent. The average household’s dual fuel bill stood at £1,184 in 2020, according to Ofgem, with £182 going on green taxes.
Who gets the money?
Mainly the Government – to pay for ‘environmental and social schemes’. These range from the warm home discount, which gives a £140 rebate each year to poor pensioners, to feed-in tariffs, which pay homeowners for energy they generate using eco technology such as solar panels.
Who brought them in?
Some were introduced under Labour but tariffs soared under the coalition government. David Cameron then reportedly told ministers to ‘get rid of all that green crap’. Green tariffs will also start to pay for a £450million scheme for heat pumps to replace gas boilers.
Are green levies still necessary?
Arguably not – because the cost of supplying renewable energy has fallen so much. It is also argued that phasing out gas boilers should wait until the replacements are better and cheaper.
Is there another way to raise the money?
Switching the burden to general taxation is one option. The wealthy would then pay more, rather than everyone paying much the same through energy bills.