Water company axes 1100 jobs

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The Independent Online

Water company Severn Trent today announced 1,100 jobs would be cut over the next two to three years in an attempt to cut costs.

Water company Severn Trent today announced 1,100 jobs would be cut over the next two to three years in an attempt to cut costs.

The announcement follows plans finalised last week by regulators forcing water firms to reduce household bills.

Brian Duckworth, Severn Trent Water's managing director, said: "Our staff have brought massive improvements in services and standards over the last 10 years.

"As we move forward we need to meet all the expectations of our customers in maintaining those improvements, yet cutting bills too."

The Midlands utility said it would also be closing a number of "non-operational" locations.

Early indications suggest the programme will cost the company about £50 million.

Severn Trent Water currently employs about 5,200 people.

Under industry regulator Ofwat's pricing regime, it will have to cut bills by more than 14% from next April and still further in subsequent years.

The company must also fund a £2 billion investment programme in its infrastructure and the environment.

Mr Duckworth said of the regulator's scheme: "With some reluctance we have decided we must accept this decision.

"We had already drawn up plans to meet the 5% cut in bills we had proposed, but Ofwat's demands go much further than that."

Unions have warned thousands more jobs will be axed at companies across the UK as a result of Ofwat's review.

Mr Duckworth said the cuts would be made across the Midlands.

"To take 1,100 jobs from a total of 5,200 does mean that we are going to have to cut back absolutely everywhere - from top to bottom in the business, every department and every geographical area."

Managers as well as workers would be affected at the Birmingham-based company.

He said he could not rule out compulsory redundancies although he hoped most of the cuts would be voluntary.

"It has been a tough time for everyone in Severn Trent. I have worked for the company for 25 years and I know just how hard the people have worked to make Severn Trent the leading water company in the country."

He added: "If customers want price cuts - and I am not sure that is the case - and the regulator says we have to cut back on costs, then there is only one thing we can do."

Negotiations are taking place with unions.

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