HomeServe axes 300 jobs as mis-selling probe bites

By DOMINIC JEFF
Published on 23/03/2013 00:00

HOME insurance and repairs group HomeServe will cut a further 300 UK jobs as it warned yesterday the customer numbers will fall over the next two years.

The firm, which is being investigated by regulators over policy mis-selling concerns, warned that it expects UK customer numbers to hit a low of 1.9 million in the year to March 2014, below analysts’ forecasts and down nearly a third on the 2.7 million it had last year.

Its UK business will now contribute £35 million less than expected in the next financial year.

The company said it had 2.25 million British customers in the year just ending, as it scales back direct marketing in the face of a Financial Standards Authority investigation launched in May.

The cuts come on top of 300 call centre job losses previously announced. This time the axe will fall across the group’s operations in Bambury, Preston and Walsall. It said more than 50 of the roles being axed were unfilled vacancies.

HomeServe, which sells cover for household emergencies such as boiler breakdowns and burst water pipes, employs about 2,700 people in the UK and has a global workforce of 4,000.

The cuts will partially offset the fall in business by saving £10m, although they will lead to a one-off charge of £4m associated with the redundancies.

HomeServe is trying to offset the shrinkage of its British business by taking its business model abroad, and customer numbers in the US business are expected to have risen by 20 per cent in the last year.

The firm said that it is aiming for a roughly even split for profits between the British and international business in the medium term. It is investing £30m in a new IT system to be implemented across the entire business, which is expected to deliver financial benefits from 2016.