East Midlands to axe 300 in efficiency drive: Tiers of management to go in reorganisation

EAST Midlands Electricity, one of the privatised regional electricity companies, yesterday announced 300 job losses. The cuts, which follow similar moves at its rivals Eastern and Seeboard, are part of a re-organisation of the company's 13 regions into seven larger areas.

Norman Askew, managing director, said: 'The restructuring of the electricity business aims to improve efficiency while enhancing standards of customer service. The challenge is to get the balance right.'

The news emerged as the annual electricity company reporting season kicked off with figures this week from ScottishPower. East Midlands is expected to report pre-tax profits of pounds 155m on 14 June and a 12 per cent increase in its annual dividend.

Most of the jobs to be cut are middle-management and administrative positions from across the East Midlands region. The company supplies an area from Milton Keynes in the south to Lincoln in the north and from the Wash to the West Midlands. All the redundancies, phased over 18 months, are expected to be voluntary.

The programme, which is expected to cost pounds 13m, will cut operating costs by pounds 10m a year. Staff numbers in the core electricity business will fall to about 4,500.

The re-organisation of the group's regions follows a six-month trial in Derby that experimented with shorter lines of communication, rendering whole tiers of management redundant. One analyst said the move was typical of an industry-wide drive to cut costs, ahead of a possible tightening of the regulatory regime this year.

In February Eastern Electricity cut 200 jobs when it replaced 10 offices with two 24-hour service centres. Seeboard announced 600 redundancies in April, when it moved its head office from Hove to Crawley and contracted out its computer operations.

East Midlands' re-organisation will also include a review of head office functions, with a view to seeing whether they can be devolved to regional offices. Each area will be treated as a separate profit centre.

The company also announced the resignation from the board of Philip Champ, who had overseen a move into electricity generation, and said that there would be no more significant investment in this division. Keith Jackson, chairman of the retail and energy services divisions, is taking early retirement.