Centrica, owner of British Gas, plans to axe 700 jobs in the summer

The owner of British Gas will axe another 700 staff from its UK offices this summer as part of a total cut of 4,000 intended to weather challenges in the energy market.

The latest blow to Centrica employees comes after the FTSE 100 energy firm reduced its workforce by 2,200 jobs last year and announced plans to cut another 500 in April.

The company has been steadily cutting jobs since last February when it announced plans for 4,000 “efficiencies” to manage the impact of falling customer numbers and a government cap on its standard energy tariffs.

A Centrica spokesman said the jobs that may be affected are in “management layers and back-office functions”.

“This difficult decision was made because we need to respond to the growing challenges we face. The energy market is going through continued rapid change, competition is fierce, our energy customers are leaving us and we’re operating under a price cap,” he said.

On the same day as its latest round of job cuts Centrica revealed plans to “broaden its footprint in the US” with the £29m takeover of energy service firm SmartWatt.

Centrica hopes the deal will help “accelerate” its growth in North America, which has emerged as a major focus for the company as its UK energy business has soured.

British Gas lost 742,000 customers last year and said the government’s price cap would land a £300m blow to its full year results.

Its market value is now less than a quarter of its capitalisation in late 2013, when the Labour party first flagged plans to take control of energy prices to end “rip off” standard variable tariffs.

Centrica will undertake a 45-day consultation process with the employees affected by its latest cost cutting move and their trade union representatives.

Justin Bowden, GMB’s national secretary, said: “Centrica’s still falling share price tells you everything you need to know about the state of the company and how it has been run over the past few years.

“British Gas cannot just cut its way out of a crisis, largely of its own making, simply by slashing jobs and trying to offshore. There has to be investment, innovation and a proper plan and vision for the future that reverses customer losses, produces growth and puts right some deep-seated cultural issues.”