Staff scramble for redundancy at British Gas
Further 4,000 employees apply to join exodus before shareholders vote for group to be split
Thursday 13 February 1997
The continuing deluge of staff means 10,000 additional employees have taken advantage of British Gas's voluntary redundancy programme on top of the 25,000 job cuts outlined in the original plans.
Demerger documents published last month revealed the group was to spend a further pounds 500m to fund the extra job cuts, on top of the pounds 1.65bn restructuring charge which launched the programme in 1993.
Yesterday's extraordinary general meeting at the National Exhibition Centre in Birmingham featured the usual flood of shareholder anger at British Gas's service problems, including last year's high-profile difficulties with a computer billing system.
The proceedings reached a climax when Neville Goldrein, a small investor, moved an amendment that Richard Giordano should be sacked from the chairman's job. Mr Goldrein found a seconder from the audience, but his motion was overwhelmingly defeated on a show of hands.
However, the gathering was smaller than some recent British Gas shareholder meetings, with a turnout of only 473 investors. However, interest in the postal vote was more impressive, with 335,000 shareholders voting out of a total of about 1.7 million. British Gas said small investors had voted by a margin of 10 to one in favour of the demerger, with big City investors predictably giving their support.
The vote means British Gas's supply division will trade from Monday as a separate quoted company, Centrica, though it will continue to use the old name on customer bills. British Gas will run the pipeline network and gas exploration activities under a new group name, BG, to be headed by David Varney.
Centrica shares have already risen strongly since trading began on the unofficial "grey market" this week, and gained another 5p to 71p yesterday.
Former executives are likely to breathe a sigh of relief that yesterday's gathering was the company's last shareholders' meeting in its current guise. In the years since Cedric Brown's bumper pay rise these events have turned into a savage public attack on the management.
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