Ovo Energy Prepares Job Cuts as Part of Turnaround Plan
Ovo Energy, a major UK energy supplier serving approximately four million customers, is planning notable job cuts next week as it seeks to demonstrate a viable path to profitability to regulators.
Sky News reports that the company is preparing to announce redundancies – potentially numbering in the “several hundred” – as early as Wednesday, aiming to save millions of pounds. These cuts are part of a revised business plan submitted to Ofgem, the energy watchdog, which focuses on improving the companyS financial health. The plan is also expected to include a temporary halt to acquiring new customers.
The move comes less than a month after the departure of CEO David Buttress, who has been replaced by Chris Houghton, a former Ovo executive. Dame Jayne-Anne Gadhia recently joined as chair of Ovo’s retail energy arm.
Ovo is currently seeking around £300 million in new investment.Talks with potential investors, including Norwegian firm Verdane and Spanish energy company Iberdrola, have recently stalled, partly due to concerns about the current regulatory surroundings.
investor confidence has been shaken by Ofgem’s new capital adequacy rules, which Ovo, along with Octopus Energy, is still working to fully meet.While not currently in breach of these rules, Ovo acknowledges the need to align with them.
Recent accounts revealed “material uncertainty” over the company’s future. To bolster its finances,Ovo is also exploring the potential sale of a stake in Kaluza,its software division.
founded in 2009, Ovo rapidly grew following its 2020 acquisition of SSE’s retail supply arm. Though, the company has faced challenges, including scrutiny from Ofgem and a high volume of customer complaints regarding billing issues. Despite these difficulties, Ovo remains a key player in the UK energy market, ranking behind only Octopus Energy and British Gas in terms of customer base.
