Organisational changes

Centrica PLC
                  

Centrica announces 850 job losses

Centrica plc today announced the reduction of around 1,450 positions within its
organisation, which, following redeployment, use of fewer contractors and the
removal of vacant positions, is expected to lead to approximately 850 job
losses. This reduction is due to the acceleration of elements of its British Gas
transformation programme and the streamlining of some supporting functions.
There will be no impact on the number of engineers and other staff who deal
directly with customers.

These changes are expected to yield an operating cost benefit in excess of
£90million in 2005. As a consequence of the job losses and a number of
associated costs, an exceptional charge of approximately £100million will be
declared in 2004.

Centrica Chief Executive, Sir Roy Gardner, said: 'This announcement marks an
important step in realising the benefits of our business transformation and will
contribute to the delivery of British Gas' eight per cent operating margin
target for 2005. It will also enable us to invest more time and resources in the
delivery of enhanced service to our customers.

'However, we recognise that this is a difficult time for those involved and will
make every effort to support them through this period of change.'

The reduction in positions will be realised primarily across managerial and
support functions. Wherever possible, affected employees will be redeployed
across the group.

Notes to editors

1. British Gas is currently engaged in a major transformation programme designed
to reduce operating costs and improve services through investment in new systems
and process improvements. This will create a more customer-focused
organisational structure, enabling a reduction in managerial positions and
support functions.

2. Centrica currently employs around 39,000 staff in the UK.

3. There will be no reduction in the number of customer-facing staff. British
Gas is recruiting call centre staff as well as an additional 1,080 engineers in
2004; following the success of its Engineering Academy, it plans to introduce
apprenticeships into call centres later this year.

Enquiries:

Centrica Media Relations 01753 494085

Centrica Investor Relations 01753 494900