Npower, one of the ‘big six’ energy providers, is set to spend £500mln on a new restructuring programme to tackle a tough UK market.
The company’s German owner, E.ON, which last year tried to merge the UK business with the consumer energy services business of SSE PLC (LON:SSE), said it plans to ramp up 'digitalisation' of Npower by serving home and small business on a shared IT platform, which will help cut costs likely by reducing the staff needed to run the business.
The latest cuts come after 900 jobs cuts announced in January in an attempt to save cash after the government's new price cap was implemented.
“The UK market is currently particularly challenging,” said E.ON’s chief executive, Johannes Teyssen, adding that the company has “emphasized repeatedly that we’ll take all necessary action to return our business there to consistent profitability”.
“For this purpose, we’ve put together proposals and already begun discussing them with British unions,” Teyssen explained.
E.ON said that Npower’s remaining operations will be restructured over the next two years, adding that it expects the UK business to deliver at least £100mln in underlying earnings from 2022 on.