British Gas says it will furlough 3,800 workers due to Coronavirus disruptions

British Gas says it will furlough 3,800 workers due to Coronavirus disruptions

  • British Gas to furlough 3,800 workers due to the ongoing Coronavirus pandemic.
  • Its parent organization, Centrica, currently employs 20,000 workers in the UK.
  • Centrica says furloughed employees will receive 100% of their salaries.

UK’s biggest supplier of energy, British Gas, announced on Wednesday that it plans on placing roughly 3,800 of its workers on furlough to cut costs amidst the ongoing Coronavirus pandemic. According to its parent organization, Centrica (LON:CNA), the health crisis is severely disrupting operations for the company.

Prime Minister Johnson declared a nationwide lockdown to minimize the fast spread of the flu-like virus in March. All non-essential businesses have been ordered to temporarily shut down and people have been restricted to their homes.

The deadly virus has so far infected over 55,000 people in the United Kingdom and has caused more than 6,000 deaths. Among the infected are the UK’s health minister Nadine Dorries, and PM Johnson himself who was admitted to the hospital yesterday as his symptoms worsened.

Centrica Employs 20,000 People In The UK

According to Centrica, the energy and services company currently employs 20,000 workers in the United Kingdom. A spokeswoman of the company stated on Wednesday:

“We’ve had to scale back some of our operations to focus on emergency work only and looking after our vulnerable customers. In the short term, we are placing some colleagues, who we can’t redeploy to emergency or vulnerable operations, into furlough to protect jobs and our business. They will receive 100% of their regular salary.”

UK’s government scheme pays the workers that are furloughed due to the ongoing health emergency 80% of their monthly salaries. Centrica said that it wishes to pay the remaining 20% salary of its furloughed employees.  

The company also said on Wednesday that it plans on resuming its non-essential services once the government eases the current restrictions.

Centrica’s Competitors Also Furloughed Employees

Centrica is not the only energy supplier in the UK that has resorted to furloughing employees. Its competitors including Npower, E.ON UK, and OVO Energy have already announced similar measures to cushion the economic blow from COVID-19.

At the time of writing, Centrica is exchanging hands at 33 pence per share in the stock market that translates to over 60% decline in 2020 so far. Its performance in the stock market, however, was already challenged before the outbreak with an annual loss of over 30% in 2019.

Losing a massive chunk of its market value in the recent decade, Centrica currently has a market cap of £1.93 billion.

By Wajeeh Khan
Mr. Khan specialises in Public Health by academia but is a trader by passion. Taking up two new hobbies of writing and trading in his teen years, he is now a professional trader and news writer with over 5 years of experience in various financial markets. Khan is passionate about bringing insightful articles to his readers and hopes to add value to their portfolios.

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