Axe falls on 700 energy jobs in Ipswich

By Kate McNally

ENERGY group Powergen has rocked East Anglia's business community by announcing plans to axe nearly 700 jobs in Ipswich before the end of the year.

Job cuts had been expected following Powergen's acquisition in October of the UK assets of TXU Europe, including the TXU Energi retail business based in Ipswich. But the level of proposed redundancies – almost three-quarters of the existing 936-strong workforce – came as a shock.

Bob Feltwell, chief executive of the Suffolk Chamber of Commerce, said last night: "This is a very disappointing start to the New Year in Ipswich. We cannot afford to lose this many jobs."

Powergen said it had decided to consolidate its business on sites in the East Midlands, where it already has a major presence, following a review of retail business activities and locations.

The restructuring includes the phased closure of three other TXU retail operations in Rayleigh, Bolton and London, with the loss of a further 276 jobs.

A spokeswoman for Powergen said the job losses in Ipswich would be in three principal areas - sales and marketing, finance, and energy trading - with some additional cuts in operational services staff. The company is hoping to achieve all redundancies on a voluntary basis.

Of the 250 Ipswich employees who retain their jobs, the majority will be in human resources, IT, and operational services and major accounts, to support the business remaining in Ipswich. The company's main offices are currently at Wherstead Park, on the outskirts of Ipswich, and at Suffolk House, in Civic Drive.

Nick Horler, managing director of Powergen retail, said a review of business systems had been the key driver in deciding where to consolidate following the TXU Energi acquisition.

"Some areas of the business are very systems intensive, so it was a question of looking at where we have the more effective set of systems and people trained to use them."

He added that, in particular, energy trading at Powergen's headquarters in Coventry had developed a close working relationship with the generating side of the business.

Mr Feltwell encouraged employees affected to take a proactive approach.

"We hope they assess their skills, seek help with training and have confidence in themselves to go for one of the growing number of jobs with small and medium firms in this region," he said.

But Ipswich MP Chris Mole criticised Powergen for ripping the heart out of one of Ipswich's biggest employers and the scale of the job losses took him by surprise.

He said: "This is significantly more than Powergen led us to believe. TXU had been talking about a reduction of some 400 to 500 and this is significantly beyond that.

"An awful lot of people in the Ipswich area will be without a job and even though the local economy is still reasonably buoyant it is going to be quite difficult to get new work."

Paul Clement, head of the Ipswich Partnership, which represents the interests of Ipswich town centre, said the job losses were a blow, but he stressed the situation was related to difficulties in the energy industry.

"The circumstances are not related to Ipswich and there is no reason to assume others businesses will follow suit. We are constantly in discussion with companies looking to expand or relocate to Ipswich town centre, and those discussions will continue. We hope the people losing their jobs will find alternative employment in the town centre."

James Hehir, chief executive of Ipswich Borough Council, also described the announcement as "disappointing" and reaffirmed the Council's commitment to bring extra employment into Ipswich.

Powergen will move out of the premises in Suffolk House when the lease expires in June. It has not yet decided whether the remaining 250 employees will be housed at Wherstead Park, which was acquired as part of the deal, or whether space will be taken in the £35 million new building next to Ipswich Town's Portman Road ground, which is still owned by TXU Europe.