Homeserve jobs go as customers fall
Home emergency business Homeserve is to cut 300 jobs as it braces itself for a fall in UK customer numbers to below two million.
The company, which is still the subject of a mis-selling investigation by the Financial Services Authority (FSA), employs more than 2,000 people across the UK, including at centres in Walsall and Preston.
It has some 2.25 million customers but, with a retention rate of around 80% and the company no longer making cold calls, it expects its customer base to stabilise at around 1.9 million customers by next March.
The company warned that this will cost it £35 million in the new financial year, although this will be offset by headcount savings of around £10 million.
Shares slumped 15% early on Friday, even though the company said it hopes the expansion of its international business, particularly in North America, will help it return to modest growth in the following financial year.
The FSA probe, which is looking into the mis-selling of household emergency policies and failures in complaints handling, is expected to continue for several more months.
Homeserve said its efforts to address the issues and reinforce a "customer-focused culture" were starting to pay off with increased customer satisfaction and 41% fewer complaints across the UK arm than a year ago.
The company, which has six million UK policies insuring against and repairing burst pipes, broken-down boilers and electrical problems, has been downsizing and overhauling its UK operation in an effort to bounce back from the crisis.
It has already cut more than 400 jobs across its call centres after stopping cold-calling tactics and deciding to focus on retaining current customers, while the group has also been retraining its remaining workforce.