Welsh Water to cut c500 jobs under two-year restructuring programme

Welsh Water is to restructure its business, including by making up to 500 redundancies, as part of a two-year transformation programme.

The company said frontline services will be enhanced, but efficiencies sought in back office and managerial positions, as a c12% workforce cut is pursued. In addition, the entire cost base will be reviewed, including goods and services procured – all in pursuit of delivering better value for money, focusing resource on customer priorities and securing financial sustainability.

The company set the announcement in the context of higher bills, increased investment needs and industry-wide credit rating downgrades.

Chief executive Peter Perry recognised the impact for staff and said voluntary exits, retraining and redeployment would be the first port of call and trade unions involved. 

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Comment: job cuts at Welsh Water may go beyond saving cash – by Verity Mitchell

The rationale for staff reductions may not be simply financial. Welsh Water’s final determination from Ofwat was notably less severe than those faced by other water companies. It experienced only a 0.4% shortfall in totex compared to its business plan, in stark contrast to the sector average gap of 7%. Furthermore, it was allocated 4% more than requested for base totex. These figures indicate that financial constraints may not be the primary driver for job cuts.

As a company lagging in performance, Welsh Water faces significant operational hurdles. These include issues with customer service, environmental compliance and general efficiency. The company’s management has publicly acknowledged that a shift in staff efficiency is necessary, focusing on improved customer and environmental outcomes. It seems that there is a need for enhanced skills and higher staff motivation to meet these operational challenges. Staff cuts may actually be designed to restructure and reinvigorate the organisation rather than merely reducing salary costs.

Ofwat’s targets for the company for the period 2025–2030 are indicative of the scale of transformation required. The company is expected to achieve:

• 79% reduction in water supply interruptions compared to current performance

• 57% reduction in customer contacts related to water quality

• 30% improvement in storm overflow management

• 24% reduction in leakage.

It seems that meeting these targets might necessitate not just process improvements but also a cultural shift within the organisation, emphasising innovation, accountability and customer focus.

Peter Perry, the CEO, has announced he will retire in Spring 2026. He may wish to leave a cultural legacy that enables Welsh Water to progress upwards in the Ofwat performance league tables.