Homeserve announce further job losses

Homeserve is to cut a further 300 jobs as a result of falling customer numbers, with the company expecting this to save them around £10m.

Homeserve plc chief executive Richard Harpin said the number of customers would continue to fall until 2014. “We expect the UK customer base to stabilise at around 1.9m customers by March 2012 and this will reduce the UK financial performance in FY14 and FY15,” he said. “As a result we are announcing the loss of 300 roles in the UK business.”

The company is expecting to see a £35m reduction in contributions in the year ending 2014 as a result of the departing customers. Revenues for 2015 are also expected to be hit by a further £20m as a result of fewer customers and the launch of new products and marketing campaigns.

However, Harpin said the group was expected to return to “modest growth” in 2015.

Homeserve is currently under investigation by the FSA for poor customer service, complaints handling and sales techniques. Homeserve UK chief executive Jonathan King (pictured) previously told Insurance Times that this was a result of trying to grow too quickly. “We set sales and profit targets that were perhaps a little too stretching,” he said. “We allowed ourselves not to focus enough on the way we control and govern the business.”

The FSA investigation is still ongoing and could result in a fine, but Homeserve has already made improvements to the ways it does business. They are now experiencing 41% fewer complaints than last year and customer satisfaction levels are rising.

The company is also investing in a new IT system, spending £30m over the next three years. It is expecting to start seeing benefits to its operational efficiencies by 2015.