E.On has announced major changes to its UK operations that will move Npower’s residential and small and medium-size enterprise customers to be served by E.On UK on a shared IT platform. Npower’s industrial and commercial customers will continue to be served separately.
E.On said Npower’s remaining operations will be restructured over the next two years.
The move could see the loss of up to 4,500 customer service jobs. E.On chief executive Johannes Teyssen said, ”We’ve put together proposals and already begun discussing them with British unions.”
In a market update for the first three quarters of the year , Teyssen 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.” Teyssen explained. Unison general secretary Dave Prentis said: “This is a cruel blow for Npower employees. They’ve been worried about their jobs for months. Now their worst fears have been realised, less than a month before Christmas.
Orentis added, “The UK energy market is in real danger of collapse. If nothing is done, there could soon be other casualties.
“Npower’s demise means there’s no time to waste. It makes the powerful case for bringing the retail arms of the Big Six energy firms into public ownership.”
E.On said the proposals would allow it to “leverage considerable advantages, primarily in IT infrastructure and customer service”.
E.On said it would focus on “leaner, increasingly digital processes that also improve the customer experience” and Teyssen said E.On UK had ”stabilised its customer base” over the year.
The restructuring will cost £500 million, Teyssen said, and ”E.ON expects its combined U.K. business to deliver at least £100 million in EBIT from 2022 onward and thus to generate positive free cash flow.”