Npower cuts UK workforce in bid to reverse losses

This week its European parent RWE revealed Npower had lost 351,000 customers, or more than 6% of its gas and electricity customer base in the UK last year, as it posted a £99m annual loss.

Npower also received a £26m fine from energy industry regulator Ofgem in December last year, for sending customers late and inaccurate bills and for poor handling of customer complaints.

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

Paul Coffey, chief exective of RWE Npower

Npower said this week its new two-year action plan would attempt to eliminate process failures afflicting its customer service and billing systems.

The 2,400 job cuts will target a mix of those who work directly and indirectly for Npower, the company added.

“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,” said Paul Coffey, chief exective of RWE Npower.

“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.

“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.”

The company has not yet specified which jobs will go, however the GMB union described the announcement as “devastating news” for energy sector staff.

"It is disappointing that hard-working members, many of whom have experienced significant disruption and uncertainty over the past 12 months, are set for yet more uncertainty over the next 12,” said Eamon O’Hearn, GMB national officer.

“It is clear government policies are resulting in a Northern Poorhouse.”

Last month Ombudsman Association figures revealed that customer complaints about energy firms in the UK rose by almost a quarter last year.

Billing continued to be the most common problem, comprising more than eight out of 10 complaints in 2015, its report said.

However, it also revealed that complaints actually fell to 10,896 in the final three months of the year, compared with 15,370 in the same period of 2014.

"Towards the end of the year, we've seen some suppliers take some encouraging steps, particularly when it comes to improving their billing processes, but there's still more that can be done,” said chief ombudsman Lewis Shand Smith.

Npower said it had already begun to put in place a number of key measures to help it produce accurate and on-time bills.  

“A major set of improvements was made to the billing system last month.  Steps were being taken to make it easier for advisors to serve customers well, for example by reducing the numbers of different screens they need to use,” the company said.

Npower said it had halved the rate of domestic complaints received per 100,000 customers in 2015, with 50% of the reduction coming in the last quarter.

However, RWE said this week it anticipated that some customer issues would continue throughout 2016.