Big six energy company Npower to navigate ‘significant losses’ with 900 UK job cuts
‘Big six’ energy firm Npower is set to cut 900 jobs as it prepares to weather “significant losses” in 2019.
The company plans to reduce its UK workforce by around 15%, blaming the decision on the Government’s price cap on default tariffs.
Npower, part of German energy group Innogy, has also pointed to “intense competition” on fixed deals as a factor behind the losses.
Around 900 roles will go over the next 12 months, with staff consultations getting underway shortly.
The firm said in a statment: “Npower is today announcing a programme to reduce its operating costs in response to the extremely tough UK retail energy market conditions, in particular Ofgem’s price cap and intense competition on fixed price tariffs.
“The proposed reductions are likely to affect around 900 roles over the course of the year out of npower’s current 6,300 workforce, although as around this number of people leave the company each year, the actual number of redundancies will be considerably lower.”
In a report by The Guardian, Npower chief exec Paul Coffey said: “The retail energy market is incredibly tough.
“Ofgem forecasts that five of the big six energy companies will make a loss or less than normal profits this year owing to the implementation of the price cap.”
He added: “And with several recent failures of new energy suppliers, it is clear that many have been pricing at levels that are not sustainable.”
Mr Coffey has hit out at unsustainable pricing offered by challenger firms – nine of which have collapsed in the last year amid rising wholesale costs.
The Government’s price cap on default tariffs took effect on January 1.
According to Ofgem, the legislation will likely save customers around £1bn.
But the regulator is next week expected to announce an increase in the the cap, adding up to £100 to the annual bills of 11 million households currently on default tariffs.
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