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Last Updated: Tuesday, 29 August 2006, 17:16 GMT 18:16 UK
Thames Water to cut 25% of jobs
Thames Water imposed a hosepipe ban on its customers this summer
The UK's biggest water firm has announced plans to axe up to a quarter of its workforce as part of a major cost-cutting drive.

Thames Water plans to cut up to 300 jobs each year until 2010.

News of the cuts comes at a time when the German-owned firm is under fire for failing to hit leakage targets, despite profits rising 31% to 346.5m.

Thames said it hoped to keep compulsory redundancies to a minimum and would consider voluntary cutbacks.

The GMB union added it would seek to ensure that no frontline jobs were lost and that investment continued despite the huge cutback.

Efficiency drive

In an e-mail to staff, chief executive Jeremy Pelczer said the move had been taken to guard against "any complacency, towards customer service or efficiency, that may arise because we are a monopoly".

"As we seek to drive the efficiencies needed to meet our goals, some of them will come through smarter procurement, but some will come from different ways of working which will involve job cuts," he added.

However, he did hold out the hope that the firm might reduce the number of workers it would axe - if it made sufficient savings in other areas.

A Thames spokeswoman said that Thames was now in talks with unions and the Department of Trade and Industry about the "potential reductions" in the workforce.

Customer service

She added Thames had acted to ensure it had the right resources in place to improve front line operations and meet its targets for water leakage.

"We want to reassure our customers that tackling leakages and improving the services we provide to our customers remains our top priority."

Thames Water has about 13 million customers and employs some 6,000 people.

Its German owner - utility group RWE - has said it is looking to get rid of the unit, either by a sale or through a public share offering.

RWE, which also has interests in gas, electricity and recycling, bought Thames Water for 4.8bn in 2000, but analysts reckon it could now fetch a far higher price.

Any sale of Thames Water is likely to be closely scrutinised by the competition authorities.

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