E.ON forecasts ‘significant number of job losses’ following npower announcement

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ENERGY giant npower will reportedly close most of its eight UK sites, threatening thousands of jobs.

Npower’s owner, Germany-based E.ON, has stated that the changes to the company’s structure hold no immediate impact on customers but the staff impacts are expected to be severe.

The company states: “Regrettably it is inevitable that a transformation of this scale will have an impact on the workforce and it is likely these proposals will result in a significant number of job losses at npower over the next two years.”

According to its public statement, the company seeks to ‘make the best of the opportunity in acquiring npower and to build a sustainable business in the UK, primarily by addressing npower’s critical and unsustainable business situation which has persisted for a number of years.’

npower Business Solutions (B2B) is not impacted by the wider announcement in relation to the future of npower.

The proposals made by E.ON regarding npower include:

  • Migration of npower’s residential and SME business customers to an E.ON platform
  • npower’s Field and Obligations activities moving to E.ON’s operating model through migration process
  • npower Business Solutions: no immediate impact on operating model or workforce as proposals are reviewed
  • Restructuring of remaining npower operations over the next two years

Michael Lewis, E.ON UK Chief Executive, said: “With npower becoming part of the new E.ON – 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.

“We are proposing a number of steps to create an E.ON business that can be both sustainable and successful for the future while also fully supporting and serving our customers today.

“For npower and its employees, these proposals will mean significant changes. We’re aware of the impact these proposals will have and there will be appropriate levels of employee support at this time.

“npower will now consult and work with with trade unions and employee representatives on all these proposals and we are committed to mitigating impact on colleagues.

“The background to these decisions is of course the unprecedented upheaval in the energy market: in the last 18 months we have seen almost one third of suppliers going bust or continuing to operate at a loss. What we’re announcing today is our response to this difficult situation in order to remain sustainable.

“I also want to reassure customers of both E.ON and npower that they should not worry about the energy they need for their homes and businesses.

“Nothing changes to your account today and your energy supplies remain safe and secure in our hands. We will be in touch with all of our customers in the coming months to let them know exactly what is happening and what it means for them.”

E.ON acquired npower, which has been reported to have been struggling financially for a number of years, in September this year.

The company serves over 3.75 million residential and business customers with electricity and gas.

Mr Lewis continued: “The proposals we’ve outlined today are in no way a reflection of npower’s people, who I know work hard to serve customers each and every day.

“It’s clear that only companies that undergo a major transformation and keep cost efficiency as a key focus will succeed in the current market and regulatory climate.

“These proposals give us an opportunity to build a successful, sustainable business so we can continue with our purpose to lead the energy transition in the UK; delivering excellent customer service and build lasting customer relationships based on smart, sustainable and personalised energy solutions.”

The npower restructure is expected to be completed by 2022 with specific areas transitioning into the E.ON operating model over the next two years.

As part of today’s proposals, it has also been announced that Michael Lewis will take over joint leadership for both E.ON UK and npower effective from 2nd December.

The E.ON UK and npower boards will remain separate.