LONDON, Jan 31 (Reuters) - Innogy SE’s npower said on Thursday it will cut 900 jobs in Britain this year to lower operating costs as it faces an “incredibly tough” retail energy market.
The UK energy supplier said the proposed reductions will be out of a workforce of 6,300, although as around this number leave each year, the number of redundancies will be much lower.
Britain’s energy market regulator Ofgem imposed a price cap on default energy bills from January this year to save households about a billion pounds a year, following a government promise to tackle rising prices.
“Ofgem itself forecasts that five of the Big Six energy companies will make a loss or less than normal profits this year due to the implementation of the price cap, and with several recent failures of new energy suppliers, it is clear that many have been pricing at levels that are not sustainable,” npower chief executive Paul Coffey said.
Britain’s big six energy suppliers are Centrica’s British Gas, Innogy’s npower and Iberdrola’s Scottish Power, SSE, EDF’s EDF Energy and E.ON
Even with the job reductions, npower forecasts significant losses this year but is trying to minimise them and continues to focus on service and value for customers, it said.
Large energy suppliers have been losing market share as smaller rivals have lured customers with cheaper deals. But several smaller providers have ceased trading in the past year.
SSE and Innogy had planned to merge their British retail energy units but this was scrapped after they failed to agree on new commercial terms after the price cap was announced. (Reporting by Nina Chestney; editing by David Evans and Alexander Smith)