Troubled energy supplier Npower has announced that it is to cut 2,500 jobs as its German owner struggles to revive its performance.
In November they announced a loss of £48 million for the first nine months of the trading year, compared to the £73 million profit it made in the same period during 2014. It also lost a massive 300,000 customers after a major billing problem which produced thousands of errors that the company were slow to deal with.
In December they were ordered to pay a settlement of £26 million – the biggest ever such payment demanded by Ofgem. The money was split between charities and affected customers.
Npower admitted around 700,000 customers were affected by the billing errors. Many were sent wildly inaccurate bills while others were sent multiple bills for varying amounts, none of which matched up to meter readings. Thousands were unable to resolve their problems and when they called to complain they were kept on hold for long periods.
It’s not clear at the moment where the axe will fall, but sources say some of Npower’s 7,500 directly employed workforce are at risk, with other jobs going at internal suppliers for the German parent company RWE and possibly outsourcing suppliers as well.
Including indirect employees, Npower supports 11,500 jobs in the UK which means up to 20% of the workforce will lose their jobs once the details are finalised.
Unison general secretary Dave Prentis said: “These job losses will come as a devastating blow to the workforce. The cuts will leave an already struggling business in a worse state and lead to months of uncertainty for staff.”
Eamon O’Hearn of the GMB union said: “Many hard-working staff have already been outsourced and so any further job losses for any directly and indirectly employed staff would be another kick in the teeth for communities.”
Kevin Coyne of Unite said: “It is an inexcusable way for the company to treat a loyal workforce which has worked hard to turn Npower’s record on customer services round in the last year.”
Npower is one of the Big Six energy suppliers in the UK – the others are British Gas, SSE, E.On, Scottish Power and EDF. They are all subject to an investigation by the Competition and Markets Authority (CMA) into the possible lack of competition in the market.
An announcement is expected soon about an expected series of measures aimed at making the market more transparent.