The owner of British Gas has told 1,300 call centre workers their jobs are being eliminated because, in the words of CEO Chris O’Shea, “customers prefer AI chatbots.” The announcement came as Centrica reported rising retail profits — and falling customer numbers.
🔍 THE BOTTOM LINE
Centrica is cutting 800 jobs now on top of 500 previously confirmed, a 14% reduction across customer service teams in Glasgow, Edinburgh, Cardiff, Leicester, Stockport, and Leeds. O’Shea frames the cuts as a response to customer behaviour, not cost-saving. But the company’s own financials tell a more complicated story: retail profits are up to £346 million while the customer base shrank from 7.5 million to 7.45 million in six months. AI isn’t replacing workers because it’s better. It’s replacing workers because it’s cheaper — and the difference is going to margin, not service.
What Centrica Actually Announced
Centrica’s plan targets a 14% reduction in British Gas’s customer service workforce across seven UK cities. The cuts will take place over two years, with some roles left unfilled after natural attrition and the remainder through redundancies.
O’Shea told The Guardian that “over 90% of our customers actually use digital channels in the first instance” and that the company has “seen a 20% reduction in customer calls.” He insisted the changes reflect customer preferences rather than AI-driven cost-cutting.
“AI isn’t driving these particular job reductions; that’s mainly due to changing customer behaviour,” O’Shea said. “We expect to grow more jobs around our digital interface, and maybe having fewer people on the phones.”
Trade unions had previously warned that the company’s investment in AI would lead to “hundreds of human jobs” being given to chatbots. They were right.
The “Customer Preference” Spin Doesn’t Survive the Financials
The problem with O’Shea’s framing is that Centrica’s own earnings report undercuts it. The retail division — which includes British Gas, boiler care, and smart energy — reported profits of £346 million for the first half of 2026, up from £338 million in the same period last year. That profit growth came despite a shrinking customer base.
O’Shea explicitly said the company has focused on “making bigger profit margins from its fixed-price tariffs rather than chase loss-making business.” In other words: British Gas is charging existing customers more and spending less to serve them. The AI chatbot rollout isn’t a customer experience play. It’s a margin optimisation exercise.
This is the same company that was ordered to pay up to £112 million in compensation after force-fitting prepayment meters in customers’ homes at the height of the Russian gas crisis — the largest energy supplier settlement on record. Customer service quality is not British Gas’s strong suit. Replacing its remaining human staff with chatbots is unlikely to improve that record.
The Broader Pattern: AI Job Cuts Are No Longer Theoretical
British Gas is not an isolated case. Across the UK and globally, AI-driven job displacement is moving from projection to fact. Nine Entertainment’s Australian newsrooms recently cut editorial jobs as AI tools take over content production. The pattern is consistent: companies cite “changing customer behaviour” or “efficiency” while the actual driver is margin expansion.
The distinction that matters is not whether AI can do the job. In many cases it can — at least for routine queries. The question is whether the savings are passed to customers (lower bills, better service) or captured by shareholders (higher margins, executive bonuses). Centrica’s financials answer that question clearly.
NZ Angle: Contact Energy and the Local Call Centre Question
New Zealand’s energy market is smaller but faces the same pressure. Contact Energy and Mercury both operate customer service teams that handle billing disputes, outage reports, and plan switching — exactly the kind of routine query work that AI chatbots can absorb. If a UK energy giant with 7.45 million customers can justify cutting 1,300 jobs, the logic applies proportionally to NZ’s smaller player base.
The difference is regulatory. The UK has the Communication Workers Union and statutory redundancy protections. NZ’s employment law framework provides similar protections, but the union density in private-sector call centres is lower. The risk is that NZ companies adopt the AI chatbot model faster, with less worker representation in the decision.
❓ FAQ
Will AI chatbots actually resolve customer issues better than human agents?
For simple queries — billing dates, plan details, outage status — AI chatbots can match or exceed human performance. For complex disputes, complaints involving vulnerable customers, or billing errors, human agents consistently resolve issues faster and with higher satisfaction. The risk is that companies cut human staff for the complex cases too, because the cost-saving logic doesn’t distinguish.
Why is Centrica cutting jobs if profits are rising?
Because the goal is not survival — it’s margin expansion. Centrica’s retail profits rose £8 million year-on-year while the customer base shrank. Cutting 1,300 staff at an average UK call centre salary of ~£28,000 saves roughly £36 million annually. That’s a 10% boost to retail profits. The cuts are about shareholder returns, not business viability.
Could this happen in New Zealand?
Yes, and probably will. NZ energy retailers face the same cost pressures and have access to the same AI chatbot platforms. The question is whether regulators and consumer advocates push back on service quality deterioration — something the UK’s Communication Workers Union is already doing.
What’s the difference between this and normal automation?
Scale and speed. Previous call centre automation moved tasks to offshore centres (still humans, lower cost). AI chatbot deployment eliminates the human role entirely for a growing percentage of queries. The transition from “outsourced human” to “no human” is happening in 2-3 years, not the 10-15 years offshore outsourcing took.
🔍 THE BOTTOM LINE
The British Gas story is not really about AI. It’s about a company that has spent years degrading customer service — forced prepayment meters, falling customer numbers, rising complaints — now using AI as the PR cover to cut costs further. O’Shea’s “customers prefer chatbots” line is the kind of statement that sounds reasonable until you check the financials. Customers don’t prefer chatbots. They prefer lower bills and competent service. Centrica is delivering neither. The 1,300 workers losing their jobs are collateral damage in a margin game, and calling it “changing customer behaviour” doesn’t make it less of a lie.
