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British Gas is planning to close a call centre at the end of the year with the loss of 550 jobs.

Union leaders said the closure of the site in Southampton would be a “blow” to the workers as well as the local economy.

The company said: “British Gas recognises that household budgets are stretched, customers are looking for maximum value for money, and to deal with us increasingly through digital channels. If we are going to remain competitive and offer the best prices for our customers, we need to reduce our costs.

“We have therefore reviewed resource levels in our energy business, and are now proposing to close our Southampton contact centre at the end of 2012 leading to a reduction of 550 roles.

British Gas

“If the proposals go ahead 50 customer services roles currently sited at Southampton may transfer to our site at Chandlers Ford.

“Our priority now is to support all those potentially impacted by today’s announcement to ensure a fair, open and transparent process throughout.

“We recognise that today’s news will be very hard for our employees and their families. This has been a very difficult conclusion to reach but we believe it is in the best long-term interests of our business.”

Mike Jeram, national officer of Unison, said: “This is obviously very worrying news and a blow for our members working in Southampton. British Gas has been a significant employer in the town for many years and the customer service centre provides a variety of working patterns that are popular with staff especially those with children or other caring responsibilities.

“Unison’s immediate priority is the interests of our members in Southampton and the impact on British Gas customers. We will rigorously examine the company’s business case with a view to defending our members’ jobs and avoiding compulsory redundancies. Members will need significant assistance from the company given the dire state of the economy if this plan goes ahead.”

independent.co.uk