Ovo Energy is to cut a quarter of its staff as it struggles with soaring energy prices and taking on new customers from a rival supplier.

The company told staff on Thursday that around 1,700 people would lose their jobs, with most staff expected to leave through voluntary redundancy.

Union chiefs accusing Ovo’s bosses of “blundering” by pressing ahead with a 2020 acquisition of SSE’s retail customers.

Unite said it had warned against the takeover, which tripled Ovo’s annual turnover from £1.5bn to £4.5bn. The job cuts are understood to relate to Ovo’s plans to integrate SSE’s business with its own.

Ovo, which was set up in 2009 as a challenger to the Big Six suppliers, become one of the UK’s biggest energy firms after the SSE deal, with five million customers.

On Thursday, Unite’s general secretary Sharon Graham said: “We will do everything in our power to defend our members’ jobs.

“We will not sit by and watch our members being made to pay the price of the pandemic.”

The redundancies come days after Ovo was forced to apologise for sending energy-saving tips to customers which included cuddling their pets and doing starjumps to keep warm.

Chief executive Stephen Fitzpatrick told the BBC he was embarrassed by the “ridiculous” advice.

Energy suppliers and their customers have been struggling with the impact of soaring wholesale energy prices which have caused more than two dozen firms to cease trading.

The energy price cap rose by 12 per cent in October to £1,277 for an average household and is forecast to jump to around £2,000 in April.

“Ovo’s decision to make redundancies shows the severity of the UK’s energy crisis,” said Tim Speed, energy and insolvency specialist at law firm, Shakespeare Martineau.

“As the third largest energy supplier in the UK, this news highlights the extent of the financial pressures the industry is facing as a whole.”

GMB union national officer Gary Carter said of the redundancies: “This is a New Year kick in the teeth for employees who have seen the company through Covid and faced increased call volumes and stress caused by the energy crisis.

“At a time when more than 20 energy companies have gone to the wall and customers are looking to other providers for their energy needs, this looks like the wrong time to cut jobs.

“Customer numbers are increasing in those companies left in the energy retail sector. The government has stood back and done nothing to address the energy crisis and we are all paying the price.”

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