Npower’s German owner axing up to 4,500 jobs and scrapping brand in major shake-up of Britain’s energy market
- The so-called big six energy suppliers will become the big five
Npower’s German owner is axing up to 4,500 jobs and scrapping the brand in a major shake-up of Britain’s energy market.
Eon said it could cut nearly 80 per cent of the energy supplier’s workforce and close a number of call centres in a radical and ‘painful’ £500million overhaul.
It will also get rid of the Npower brand as it absorbs around 2.5million household customers into Eon’s retail business. This will mean the so-called big six energy suppliers – which also include British Gas, SSE, EDF and Scottish Power – will become the big five.
Overhaul: Eon said it could cut nearly 80 per cent of Npower’s workforce and close a number of call centres
Struggling Npower was deserted by a further 261,000 customers in the third quarter of 2019. Around 447,000 ditched the supplier in the first nine months of the year.
It posted a loss of £142million between January and September, while full-year losses were expected to top £210million.
By contrast, parent company Eon made profits of £1billion in the first nine months of the year.
Unions slammed the decision to announce job cuts less than four weeks before Christmas as a ‘cruel blow’ to Npower’s 5,700 staff.
Dave Prentis, the general secretary of Unison, said: ‘They’ve been worried about their jobs for months. Now their worst fears have been realised, less than a month before Christmas.’
The cuts will occur over the next two years and the restructuring is expected to be completed by 2022. Three call centres could close – at Houghton-le-Spring near Sunderland, in Hull and in Worcester.
Eon bought Npower’s German owner Innogy in September. It made it clear early on that it would not tolerate having a loss-making division in its portfolio.
Eon chief executive Johannes Teyssen said in September his team would assess the situation and that decisions would ‘be taken quickly’.
‘THE ENGLISH PATIENT’
Struggling Npower has been dubbed ‘The English Patient’ by detractors on the continent, where its German owner Eon is based.
The loss-making utility firm has also come under fire from Eon’s chief executive, Johannes Teyssen.
The 60-year-old has brutally described Npower as ‘an open wound that is bleeding profusely’, and had previously made it clear that Eon does not ‘entertain for the longer-term a loss-making business’.
The cutting ‘English Patient’ nickname is a reference to the acclaimed 1992 Michael Ondaatje novel in which an Englishman burned beyond all recognition is treated by a nurse in an Italian villa.
In 1996 it was turned into an Oscar-winning film starring Ralph Fiennes.
Npower has blamed an energy price cap introduced by the Government on January 1 for hammering its performance. This capped the rate at which the major suppliers could charge for their default tariffs.
A GMB union spokesman said: ‘The Government has to urgently wake up to the impact that the price cap is having on good and reasonably well-paid jobs in UK energy companies.’
The big six energy firms have also been battling a customer exodus to smaller challenger firms – though many of these have later gone bust – and the threat of nationalisation under a Labour government.
Yesterday Teyssen said the UK market ‘has been challenging for several years’.
Michael Lewis, Eon’s UK chief executive, said last night: ‘The proposals we’ve outlined today are in no way a reflection of Npower’s people. With Npower becoming part of the new Eon – creating the second-largest supplier in the UK – we need to build a sustainable business with a lower cost base that allows us to compete in this extremely challenging market.’
The restructuring plan will see Npower’s residential and small and medium-sized business customers move onto Eon’s platform, while Npower’s industrial and commercial customers will be moved into a separate business.
Teyssen indicated this division could eventually be spun out of the company.
Npower customers will not need to do anything at this stage but will be contacted by Eon in due course. Mark Todd, co-founder of comparison site Energyhelpline, said: ‘Npower has been dogged by customer service problems over the years so using Eon’s systems is likely to lead to better service in the end for customers.’