LONDON: British energy supplier npower, a unit of Germany’s RWE, said on Tuesday it will axe 2,400 jobs after posting an annual loss on fierce competition, sliding sales and operational problems.
The company announced in a statement, published alongside RWE’s 2015 results, that it suffered an “extremely disappointing” performance and will shed about one fifth of its UK workforce in a new cost-cutting drive.
“By 2018, around 2,400 fewer people will support npower overall through a mix of those who work directly and indirectly for npower,” said Paul Coffey, chief executive of RWE npower.
The division meanwhile slumped into the red last year with an operational loss of £99 million ($141 million, 128 million euros). That contrasted sharply with a profit of £183 million in 2014.
“This reflected . . . a high level of competition in both the domestic and business customer markets, reduced sales volumes and the continuing cost of domestic customer service system and process problems that began in 2013,” the group said.
The number of customer accounts slid seven percent to 4.77 million by the end of last year.
In December 2015, the group agreed with British energy regulator Ofgem to pay £26 million in a vast customer redress package after failings with its billing and complaint handling.
The two-year recovery plan is meanwhile aimed at delivering a “robust business” built on lower costs, simplicity and high-quality customer service, it said.
“Npower takes its responsibilities to its employees seriously and will consult fully with affected employees and with unions over its proposals for the future of the business,” it added.
However, trade unions blasted the move.
“These huge job losses will come as a devastating blow to the workforce,” said Dave Prentis, general secretary at Unison.
“Npower has been in trouble for some time thanks to poor decision-making at the very top, and workers are now paying the price.
“The company’s failure to invest properly in new systems has left it with one of the worst customer service records in the business.”
The German group’s two main businesses in Britain—comprising npower and RWE Generation—made a combined operating loss of £154 million.
RWE npower employs a total of 11,500 people in Britain. There will be no job cuts at any of the division’s power stations.