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Npower, one of the six largest companies in the energy sector, must cut 900 jobs. The company warned that it would suffer significant financial losses this year.
The German supplier has attributed to the reduction of the British workforce about 15% of the British workforce on price caps imposed by the government at the default rates and "intense competition" in the sector to the detriment of transactions package.
Npower said that about 900 positions would be awarded over the next year and that she would consult with staff over the next month.
The company's general manager criticized what he described as unsustainable pricing by competing companies, nine of which collapsed over the last year due to rising wholesale costs.
Paul Coffey said, "The retail energy market is incredibly difficult. Ofgem expects that five of the six largest energy companies will experience losses of less than or equal to the usual profits this year due to the implementation of the price cap. And with several recent failures from new energy providers, it is clear that many have set their prices at levels that are not sustainable. "
The cap came into effect on January 1 and Ofgem announced savings of around £ 1 billion for consumers, which would significantly reduce revenues for large suppliers.
The regulator is expected to announce an increase in the ceiling next week, potentially adding nearly £ 100 to the annual bills of 11 million households for default rates.
Coffey said that npower was still forecasting "significant losses" this year, even after the savings resulting from a reduction in payroll. Innogy SE, its German owner, has already warned that maintaining npower could have a negative impact on the group's overall profits of up to € 250m (£ 218m) in 2019.
Npower had hoped to merge with the group's six large corporate group, SSE, but the deal collapsed in December after they failed to agree on the amount of capital to inject into the new provider.
The ownership of the company should rather be transferred to E.ON as part of a complex badet exchange between Innogy and the rival German energy company. It is feared that this will lead to more job losses when the transfer takes place later this year.
The unions said the announcement of the job cuts announced Thursday was "bad news" and warned of further losses in the industry. Matt Lay of Unison said, "This is just the tip of the iceberg – Npower is not the only company fighting. The entire UK retail energy market is broken and requires an urgent solution. "
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