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Centrica cuts 6,000 jobs

Energy firm Centrica is cutting 6,000 jobs as it reported a doubling of profits at its British Gas business in the first six months of the year, the BBC has reported.

The company said half the jobs lost would be through redundancies. Centrica said it would also create jobs in growth areas, so it expected the net impact to be about 4,000 job losses.

In the first half of 2015, profits at British Gas’s residential arm rose to £528m up from £265m a year earlier.

Centrica said the rise in profits at British Gas was due to higher gas consumption, which was triggered by the cold weather earlier this year compared with milder weather in the first half of 2014.

However, the strong performance at British Gas was offset by a collapse in profits at Centrica’s oil and gas production division. Profits in this unit fell 78% to £116m as a result of lower oil prices.

Centrica appointed Iain Conn as chief executive at the start of this year.

He has been conducting a strategic review of the business over the past five months, which has concluded Centrica should concentrate on the British Gas side of the business and reduce its activities in actual energy production.

Mr Conn denied the company was making excessive profits at British Gas.

British Gas cut prices by 5% earlier this year, and is due to cut gas prices by a further 5% next month, which the firm says will mean average savings of £72 a year.

Mr Conn said profits per customer would remain at the same level as in other years, at about £40-£65 a year.

British Gas supplies nine million households, meaning that it has more domestic customers than any of its rivals,

The energy sector has come under scrutiny by the Competitions and Markets Authority (CMA), which earlier this month said energy companies were collectively overcharging customers by £1bn a year.

Mr Conn disputed the figure, telling the BBC that it amounted to more than the profits of the entire industry.

Centrica also announced it would cut the interim dividend by 30%, a move that affects some 650,000 individual small shareholders.

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