Centrica announces a simpler and more customer-focused business model

Centrica plc has today announced plans for a significant restructure designed to create a simpler, leaner Group focused on delivering for our customers.

The company will have fewer customer-facing business units all of which will report directly to the CEO. Three management layers will be removed to create a flatter, less bureaucratic organisation which is closer to, and focused on, the customer. As a result of these changes, around half of the current 40 strong Senior Leadership Team will leave the group by the end of August.

The revised operating model is expected to accelerate the delivery of targeted cost savings and lead to a reduction of around 5,000 roles across the Group, with over half of the departures expected to come from management layers. The majority of the restructuring is expected to take place in the second half of 2020, following consultation on the proposals with our colleagues.

In addition to the proposed new organisational design, the company will today start consultation to simplify terms and conditions for employees in the UK. Centrica has over 80 different employee contracts, each with multiple variants, with many of the agreements dating back over 35 years. We need to modernise these to enable us to best serve the changing expectations of today’s customers while retaining the quality of our services.

Commenting on the changes, Centrica Group Chief Executive Chris O’Shea said:

“Since becoming Chief Executive almost three months ago, I’ve focused on navigating the company through the Covid-19 crisis and identifying what needs to change in Centrica. We’ve learnt through the crisis that we can be agile and responsive in the most difficult conditions and put our customers at the heart of our decision making. However, I believe that our complex business model hinders the delivery of our strategy and inhibits the relentless focus I want to give to our customers. We have great people, strong brands that are trusted by millions and leading market positions, but the harsh reality is that we have lost over half of our earnings in recent years. Now we must bring focus by modernising and simplifying the way we do business.

I truly regret that these difficult decisions will have to be made and understand the impact on the colleagues who will leave us. However, the changes we are proposing to make are designed to arrest our decline, allow us to focus on our customers and create a sustainable company.”