Npower owner warns staff they will be first to be cut in E.ON deal

Npower owner Innogy has privately told staff it is extremely concerned they will bear the brunt of thousands of job cuts planned as part of a major shakeup of the European energy industry.

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

Innogy management said publicly last week that it feared its 43,000 staff would be at a disadvantage to E.ON employees as roles are shed during the integration of the firms next year.

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More than 6,000 of those are based in the UK, mostly at npower but also in the company’s renewable energy business.

Leaked emails from management to staff reveal how deeply worried the firms’s leadership is that Innogy staff will be the biggest losers from the deal.

Uwe Tigges, the Innogy chief executive, wrote: “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.”

He said that talks with E.ON and RWE had so far failed to secure legally binding assurances that Innogy staff would not be unfairly affected.

As a result of the impasse, Tigges told workers in an email: “E.ON accepts that you, our employees, must continue living with significant uncertainty.”

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

The UK competition watchdog last week launched a full-scale investigation into the merger, saying the move could push up energy prices.

Npower’s profits for the first three months of the year were up by more than a quarter, to £37m, despite losing 66,000 domestic customer accounts due to “intense market competition”.

The firm was boosted by the price hike it announced last year, higher demand because of below-average temperatures and its continued cost-cutting efforts.

Paul Coffey, npower chief executive, said: “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.”

He warned that the energy market remained tough, and said the government’s energy price cap later this year meant npower would have to continue to strictly manage its costs.

The energy supplier was widely criticised last week after becoming the fifth of the big six energy suppliers to hike its standard tariff for about 1 million customers.

The company’s standard tariff was already the most expensive of the large suppliers, even before the increase.