Owner of Npower Warns Employees They Will Be First To Be Cut In E.ON Deal

Photo via Campaign

Innogy, the owner of Npower, has privately informed its employees that it is extremely concerned that they will bear the horror of thousands of job cuts that were planned as a part of a major shakeup of the energy industry of Europ.

E.ON, the German energy giant has warned that a maximum of 5,000 jobs will be cut when it acquires the customer-facing parts and energy networks of Innogy, as a part of a massive asset swap with RWE.

Last week, the management of Innogy publicly said that it feared that its 43,000 employees would be at a disadvantage to the employees of E.ON as roles are dropped during the integration of the companies in 2019.

Over 6,000 of those employees are based in the United Kingdom, the majority are at Npower but also in the renewable energy business of the company.

The leaked emails from the management to the employees reveal how deeply concerned the leadership of the firms is that the staff of Innogy will become the biggest losers from the said deal.

The chief executive of Innogy, Uwe Tigges, said in the email: “We are extremely concerned that the planned transaction and the job cuts announced by E.ON will be unilaterally pursued to the disadvantage of the Innogy employees.”

The CEO said that talks negotiation RWE and E.ON had so far failed to secure some legally binding assurances that the staff of Innogy would not be affected unfairly.

As an outcome of the impasse, Tigges informed the workers: “E.ON accepts that you, our employees, must continue living with significant uncertainty.”

The worries come as Npower said on Monday that the merger with the energy supply business of the UK-listed SSE was on track.

Last week, the competition watchdog of the United Kingdom launched a wide-scale investigation into the said merger, saying that the move could increase energy prices.

For the first three months of the year, the profits of Npower were up by over a quarter, to £37m, despite losing approximately 66,000 domestic customer accounts because of “intense market competition.”

The company was boosted by the price increases that it announced in 2017, higher demand due to below-average temperatures and its continued efforts on cost-cutting.

The chief executive of Npower, Paul Coffey, stated: “Although our results show signs of progress, this is mainly due to cost management as the market we operate in remains very competitive, which is putting real pressure on margins and customer account numbers.”

Coffey warned that the energy market continued to be tough, and said that the energy price cap of the government later this year meant that Npower would have to continue to manage its costs strictly.

Last week, the energy supplier was hugely criticised after becoming the fifth of the big six energy suppliers to increase its standard tariff for approximately 1 million customers.

The standard tariff of the company was already the most expensive of the large suppliers, even before the price hike.