Npower is to cut 900 jobs, 14 per cent of its workforce.
The company blamed tough market conditions, the price cap and intense competition on fixed price tariffs.
CEO Paul Coffey said the company would still make a “significant” loss for the year after slashing headcount and wage bill.
He said the recent spate of small suppliers going bust, some after acquiring customers through loss-leading tariffs, showed “many have been pricing at levels that are not sustainable”.
The company will start consulting with staff next month.
After the collapse of the proposed merger with SSE, it has been reported that Eon will end up with the company after the asset swap deal with RWE. Neither Npower nor owner Innogy have commented on that outcome.