The news was described as a ‘body blow’ by one union official, coming just weeks before Christmas. Workers will be given details at briefings later today.
Npower, one of the Big Six energy suppliers in the UK, lost 261,000 customers in the third quarter of this year.
The company now has fewer than half a million customers – around 447,000.
In a statement, E.ON confirmed that there would be a ‘significant number’ of jobs lost over the next two years.
E.ON UK chief executive Michael Lewis 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 whilst 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 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.’
Johannes Teyssen, chief executive of Npower’s owners E.ON said: ‘The UK market is currently particularly challenging. We’ve emphasised 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.’
E.ON said it was stepping up its ‘ambitious cost-cutting efforts’ without losing sight of its customers, adding: ‘This is based on leaner, increasingly digital processes that also improve the customer experience.’
