Eon wields the knife at Npower, big cuts ahead

Mike Lewis to head both brands

Eon has moved to stem big losses at Npower, planning major job cuts and removing CEO Paul Coffey.

The company plans to fuse Eon and Npower back-ends, though Npower’s larger business customer unit will remain separate. “We will then be upgrading just one set of IT infrastructure instead of two separate systems and teams,” said Eon chief executive Johannes Teyssen.

Teyssen said the company was in discussions with unions and staff and would not confirm the total number of jobs at risk.

However, the company said Npower’s 4,500 business-to-consumer staff are “the target group that would be concerned with these measures”.

Eon UK CEO Mike Lewis will oversee the two companies. Npower CEO Paul Coffey is out after 17 years at the firm.

Eon flagged in September that it would move to staunch what it described as an “open wound”.

“The UK [energy retail market] has been challenging for a number of years. Churn rates are high, margins are slim and the price cap has exacerbated the situation,” said Teyssen.

“No company operating there has been spared these difficulties. Not Eon UK and certainly not Innogy’s subsidiary Npower, which was in a difficult state prior to the regulatory market interventions.”

Eon plans to spend £500m restructuring its UK retail operations over the next two years and aims for them to be cash positive by 2022.

Eon was left with Npower after an asset swap with parent company RWE. It hoped to offload the loss-making business, but plans to create a merged retail operation with SSE collapsed and other mooted buyers failed to emerge.

Listen to the press conference here.

Related stories:

Eon “will move quickly” to resolve Npower’s future

Npower posts deeper operating loss

Innogy finance chief: winding down Npower an option

Opinion: Amazon would be a good buyer for SSE plus Npower

Npower to cut 900 jobs

SSE-Npower merger scrapped

Eon and RWE strike major deal

Supplier debt crisis creating “house of cards”

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