British Gas owner Centrica is to axe 4,000 jobs despite making a profit of £1.25bn.
It blamed a number of factors for the move – including pointing the finger at the government’s energy price cap.
Centrica shed 1.4m customers and described its performance in the UK in the second half of last year as “weak”.
Chief executive Iain Conn revealed group profits fell 17%, adding that the job losses were in part owing to “intense” competition and partly to customers “moving to digital”.
He also pointed a finger at the incoming price cap, telling the BBC: “There is a link between our cost efficiency programme and preparing for any price cap in the UK. We’ve got to be competitive and this measure means we’ve got to drive more efficiency.”
That “efficiency” drive will see cuts of £1.25bn per year by 2020.
The firm’s British Gas business lost 9% of its UK domestic customers, from 14.2m to 12.8m, between 2016 and 2017, yet still saw profits rise 3% to £572m.
Theresa May wants to introduced a price cap for the most vulnerable households to ensure they get the best deal for their energy.
Despite the efforts to make switching suppliers easier, some 12 million customers across the energy sector are on default standard variable tariffs, which are usually more expensive than many other deals they could sign up to.
Conn added: “Our financial result in the second half of 2017 was weak, primarily reflecting poor performance in business energy supply and particularly in our North America business unit.
“The combination of political and regulatory intervention in the UK energy market, concerns over the loss of energy customers in the UK and the performance issue in North America have created material uncertainty around Centrica and, although we delivered on our financial targets for the year, this resulted in a very poor shareholder experience.
“Our focus today is on performance delivery and financial discipline – on demonstrating top-line growth as we deliver improved service and new propositions for our customers, and driving efficiency as hard as possible to underpin our competitiveness.”
Centrica said it also hoped to create 1,000 jobs over the next two years.