Centrica which owns British Gas, has said it will cut 5,000 jobs due to the impact of the coronavirus pandemic on an already declining business.

The company said more than half of the job cuts will affect managers as part of a swingeing restructure and most will take place in the second half of 2020.

The group plans to cut out three management layers, with around half of the current 40-strong senior leadership team leaving the group by the end of August.

But it is also starting consultations on plans to “simplify terms and conditions” for all its UK employees, who are on more than 80 different employee contracts.

As part of the overhaul, it announced that Sarwjit Sambhi, chief executive of Centrica Consumer, and Richard Hookway, chief executive of Centrica Business, are stepping down from the board immediately and will leave the company by the end of July.

Chris O’Shea, Centrica’s recently-appointed chief executive, said: “I believe that our complex business model hinders the delivery of our strategy and inhibits the relentless focus I want to give to our customers.

“We have great people, strong brands that are trusted by millions and leading market positions, but the harsh reality is that we have lost over half of our earnings in recent years.

“Now we must bring focus by modernising and simplifying the way we do business.

“I truly regret that these difficult decisions will have to be made and understand the impact on the colleagues who will leave us.”