Npower, one of the UK’s “big six” energy providers has confimed that it will be reducing its workforce and 2,400 jobs will be lost. The news comes after the company declared a £106 million loss for 2015 and also lost 351,000 customers.
RWE, the company’s parent based in Germany has said that Npower is undergoing major restructuring.
Those affected by the cuts are its full-time employees and its contractors.
The impact on the workforce is due to the declining numbers of customers which has gone from 5.13 million to 4.77 million. Npower stated that the reason for this decline is the overwhelming billing problems and the stronger competition within the market.
Npower has been inundated by customer complaints regarding bills and just last year in December the company was fined by regulators £26 million for such issues stating that the energy provider was, “failing to treat customers fairly”
RWE commented on the 2015 operating loss and said:
“The main reason for this is serious process and system-related problems in customer billing. Substantial earnings shortfalls also stemmed from the fact that residential and commercial customers switched providers or we were only able to retain such customers by offering them contracts with more favourable conditions”.
NPower’s chief executive also gave comment on the loss and said that the results were “extremely disappointing” and that it would take around two years to rectify.
He also continued: “They show a business that tried to do too much, too soon while not focusing enough on the fundamentals in a constantly changing market. This led to over complicated processes and procedures resulting in unhappy customers, too many complaints and extra costs to put things right.”
The results of the energy provider were announced prior to UK competition regulators announcing various actions against the energy markets which will call for more transparency after it has been alleged that customers are being over charged for energy usage.
Several of the industry’s big players such as Britsh Gas and SSE, with Npower have also announced price cuts over the last few months, however this has been met with criticism by ministers and customers who say that the companies have done little in terms of cuts with their standard tariffs despite having their wholesale prices reduced over the last year.
Npower have implemented a 5.2 per cent price cut to its standard gas tariff which will affect 1.2 million of its customers.
Dave Prentis, the Unison general secretary said this on the matter:
“These huge job losses will come as a devastating blow to the workforce.”
He went on to say:
“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”.