Potential North East job losses as Npower release plans for 2,400 cuts

Npower is to cut the jobs after reporting losses of more than £100 million.

The energy giant said it will make "extensive cost savings" to help turn around the "significant" losses made in 2015 and return the company to profitability.

The German-owned company said its 11,500 employees will be reduced by 2,400, through a mix of those who work directly and indirectly for npower.

A two-year recovery plan was announced to deliver a "robust business" built on lower costs, simplicity, high-quality customer service, and ready for the challenges of the future.

A statement 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."

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.

"Energy should be simple for our customers and we have complicated it. Our plan is to create an npower that delivers better service, is more attractive to customers and better prepared for future opportunities - all at lower costs.

"This will be a huge task for all of us but we are determined to create the better business that our customers expect and shareholders demand.

"I regret that, as we simplify and streamline our activities, this will mean inevitable job losses but I am convinced that these steps are critical to protect the thousands of jobs that will remain."

Despite these results, RWE said its generation and retail arms increased investment in Britain's energy infrastructure to £220 million, an increase of £28 million under "very challenging" market conditions.

Yesterday, Houghton and Sunderland South MP Bridget Phillipson told the Echo that Npower were not making any “planned redundancies” at the site in Rainton Bridge, Houghton.

She said: “Npower is a major employer in my constituency with around 2,000 staff based at its Rainton Bridge centre.

"Following speculation about major job losses, I spoke directly with senior management at the firm.

“I received assurances that there are no planned redundancies at Rainton Bridge, and that npower remains fully committed to the site.

"Understandably this is an unsettling time for staff during this difficult time for the company.”

The job cuts will be spread across offices, including some in the Midlands, and are not "site specific".

But npower confirmed the closure of an office in Burton, which employs around 200 staff.

There will be no job cuts at any of npower's power stations.

Big Six energy giant npower revealed it lost more than 350,000 customer accounts in 2015 after an "extremely difficult" year of hefty financial losses and customer service failings.

The provider - owned by German energy group RWE - racked up annual losses of £99 million against profits of £183 million in 2014.

It said customer gas and electricity accounts dropped by around 7%, or nearly 355,000, to 4.77 million by the end of 2015 after long-running problems with its IT billing system and poor complaints handling, which landed npower with a £26 million fine from regulator Ofgem in December.

But npower said it was beginning to see improvements in its customer service, with complaints per 100,000 customers more than halving last year - with progress picking up towards the end of the year.

It insisted that by the fourth quarter, customer complaints were below the industry average.

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."

He added that overhauling the group will be a "huge task" and insisted the job losses confirmed alongside its results will "protect the thousands of jobs that will remain".