Energy giant reveals restructuring after £99m losses

ENERGY group Npower, which employs 2,500 people in the West Midlands, has confirmed it is to make 2,400 job cuts over the next two years .

The Big Six provider also revealed full-year losses of £99m, which is partly a result of falling oil and gas prices. Last month it announced a 5.2% cut in its gas price.

Npower, which is part of German energy giant RWE, was also hit by a £26m payout in December for poor complaint handling and inaccurate bills.

It said it will make “extensive cost savings” to help turn around the losses made in 2015 and return the company to profitability.

The company also said it will “continue the property consolidation programme started in 2013 to reduce its current 26 sites so that locations are grouped around three regional hubs”, but a spokesperson was unable to say which sites would be affected by the rationalisation.

Npower employs 11,500 people directly and indirectly in the UK and has West Midlands sites in Worcester, Solihull, Oldbury and Burton-on-Trent.

Its plans to achieve its cost savings by streamlining activities across the company, eliminating process failures in its customer service and billing systems, and rationalising the number of systems it uses.

A statement read: “This will both improve the efficiency of its day to day operations and eliminate the cost of re-work.”

Npower has hinted that the job cuts will be a mixture of full-time staff and contractors.

Paul Coffey, chief executive of RWE Npower, said: “Npower results continue the trend seen earlier in 2015, but they are nonetheless extremely disappointing and we are starting a two year process to fix them. 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.

“These issues are not insurmountable. Over the past few months, we have looked at every part of Npower, and over the next two years we’re fundamentally changing how the company operates. We shared the outcome of this review yesterday with employees. By 2018, around 2,400 fewer people will support Npower overall through a mix of those who work directly and indirectly for Npower.”