Npower Axe 900 Jobs In A Bid To Cut Costs | Dyball Associates

Following the failed tie up of Npower and SSE, the big six energy supplier has announced it will be reducing its workforce by around 900 over the course of 2019, and it’s blaming it on the energy price cap.

Job Losses

Npower currently employs around 6,300 staff, meaning this jobs cut will be a loss of around 14%of its workforce. Headquarters of the firm are based in Swindon, Wiltshire.

They haven’t specified which roles will be affected, and said that of the 900 people due to exit the company, not all of them will be made redundant.

The company has said that close to 900 people leave the company annually anyway, so it will be more a case of not re-filling roles rather than letting too many people go unwillingly.

However, it’s likely there will be job losses, and Matt Lay from Unison said this was ‘grim news’. They forecast an ‘anxious few months for staff across the company’.

The job losses at Npower have been blamed on the recent introduction of the energy price cap on tariffs. Npower say this has been eating into its profits, while their earnings from fixed price deals have also been reduced due to the highly competitive marketplace.

Chief executive of Npower, Paul Coffey, commented: 'The retail energy market is incredibly tough. 'With several recent failures of new energy suppliers, it is clear that many have been pricing at levels that are not sustainable.

'Even with these reductions, we still forecast significant losses this year, but we're doing everything we can to minimise them whilst continuing to focus on service and value for our customers.'

The company is predicting a year of ‘significant losses’, even with the savings from a reduced workforce being taken into account. The owner of Npower, Innogy SE, has warned that keeping Npower in business could take as much as €250m (£218m) out of the group’s profits over the course of 2019.

Npower had planned to merge with the retail arm of SSE, but the deal collapsed after failure of the two companies to come to an agreement on the amount of capital to be injected into the new venture.

Ownership is now planned to be transferred to EOn, as part of a complicated asset swapping initiative between themselves and Innogy. The fears are that this could lead to more job losses across the industry too.

The cuts by Npower are the latest evidence of the tough times being experienced in the energy supply market .

Many providers are also complaining of struggles to remain profitable with the energy price cap in place, with Centrica even going so far as to launch a legal challenge against the legislation.

 Ofgem itself has forecasted that at least five of the so-called ‘big six’ will make lower profits or even losses as a result of the energy price cap. Independent energy suppliers are struggling too, with Our Power the latest in a string of independent energy suppliers to go out of business.

Unison’s Matt Lay predicted that we haven’t seen the end of the problems yet. He commented:

“It’s just the tip of the iceberg – npower isn’t the only firm struggling. The UK’s entire retail energy market is broken and in need of an urgent fix.”

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