British Gas Owner Centrica to Cut 1,300 Jobs, Citing Customer Preference for AI

The owner of British Gas has claimed that most households would rather speak with an AI chatbot than deal with the company’s staff as it prepares to cut 1,300 jobs from its call centres and back office.

Centrica, the supplier’s FTSE 100 owner, plans to cut 800 jobs as the company carries out a “targeted deployment of AI tools”, on top of the 500 cuts it confirmed last month.

The plan to reduce the supplier’s customer service teams in Glasgow, Edinburgh, Cardiff, Leicester, Stockport and Leeds by 14% is expected to take place over two years, meaning some roles will be left unfilled after resignations, while the balance will come from redundancies.

Trade unions have previously said the company’s investment in artificial intelligence to help simplify its business would lead to “hundreds of human jobs” being given to chatbots.

But Chris O’Shea, the company’s chief executive, insisted that the changes were being made because customers preferred to take their queries to digital channels rather than people.

“AI isn’t driving these particular job reductions; that’s mainly due to changing customer behaviour,” he said. “What we’re seeing just now is over 90% of our customers actually use digital channels in the first instance, and we’ve seen a 20% reduction in customer calls, so this simply reflects the changing customer behaviour.

“We’ve got to reflect the changes in customer behaviour. We expect to grow more jobs around our digital interface, and maybe having fewer people on the phones.”

O’Shea defence of Centrica’s plans came as it reported a rise in retail profits over the first half of the year despite falling customer numbers.

British Gas has gradually lost customers to rival suppliers in recent years. It is expected to pay out up to £112m in compensation to thousands of British Gas customers who had prepayment meters force-fitted in their homes at the height of the Russian gas crisis in the biggest energy supplier settlement on record.

Profits from Centrica’s retail division, which includes revenues from British Gas as well as its boiler care and smart energy products, rose to £346m in the first six months of the year, from £338m in the same period last year.

Its profits climbed even as the number of British Gas domestic customers fell to 7.45 million, from 7.5 million at the end of last year, because the supplier has focused on making bigger profit margins from its fixed-price tariffs rather than “chase loss-making business”, O’Shea said.