Fears for 500 Oldbury jobs as npower wields axe on 2,400 positions

The energy giant said it will make "extensive cost savings" to help turn around the "significant" losses made in 2015 and return the company to profitability.

The German-owned company said its 11,500 employees will be reduced by 2,400, through a mix of those who work directly and indirectly for npower.

It is not yet known whether jobs in Oldbury and Burntwood will be affected.

The company, owned by German group RWE, ended days of speculation today by confirming that its 11,500 strong workforce will be reduced by almost a fifth.

The two main RWE businesses in the UK made an aggregate loss of £154 million in 2015 - £99 million at npower and £55 million at RWE Generation.

The job cuts will affect a mixture of direct and indirectly employed staff across 26 sites, but there will be no job cuts at any of npower's power stations..

A two-year recovery plan was announced to deliver a "robust business" built on lower costs, simplicity, high-quality customer service, and ready for the challenges of the future.

A statement said: "Npower takes its responsibilities to its employees seriously and will consult fully with affected employees and with unions over its proposals for the future of the business."

These consultations are due to take place today.

Unison general secretary Dave Prentis said: "These huge job losses will come as a devastating blow to the workforce.

"Npower has been in trouble for some time thanks to poor decision-making at the very top, and workers are now paying the price. The company's failure to invest properly in new systems has left it with one of the worst customer service records in the business."

A two-year recovery plan was announced to deliver a 'robust business' built on lower costs, simplicity, high-quality customer service, and ready for the challenges of the future.

A statement said: "Npower takes its responsibilities to its employees seriously and will consult fully with affected employees and with unions over its proposals for the future of the business."

Paul Coffey, chief executive of RWE npower, said: "Npower results continue the trend seen earlier in 2015, but they are nonetheless extremely disappointing and we are starting a two-year process to fix them.

"They show a business that tried to do too much, too soon, while not focusing enough on the fundamentals in a constantly changing market. This led to over-complicated processes and procedures resulting in unhappy customers, too many complaints and extra costs to put things right.

"These issues are not insurmountable. Over the past few months, we have looked at every part of npower, and over the next two years we're fundamentally changing how the company operates.

"We shared the outcome of this review yesterday with employees. By 2018, around 2,400 fewer people will support npower overall through a mix of those who work directly and indirectly for npower.

"Energy should be simple for our customers and we have complicated it. Our plan is to create an npower that delivers better service, is more attractive to customers and better prepared for future opportunities - all at lower costs.

"This will be a huge task for all of us but we are determined to create the better business that our customers expect and shareholders demand.

"I regret that, as we simplify and streamline our activities, this will mean inevitable job losses but I am convinced that these steps are critical to protect the thousands of jobs that will remain."

Despite these results, RWE said its generation and retail arms increased investment in Britain's energy infrastructure to £220 million, an increase of £28 million under "very challenging" market conditions.

Eamon O'Hearn, of the GMB union, said: "GMB is disappointed that hard-working members, many of whom have experienced significant disruption and uncertainty over the past 12 months, are set for more uncertainty over the next 12.

"GMB members, in particular those in customer-facing roles, have been instrumental in helping the company to turn around the retail business and we deserve to know the full picture as soon as possible.

"RWE's German workforce would not be treated in this manner, and it is fuelling concerns that this announcement was leaked to satisfy City traders without any thought for the impact on the morale of dedicated members.

"GMB hopes that is not the case and believe the company now has an uphill battle to ensure that this perception isn't a reality.

"GMB stands ready to work with the company to continue to provide professional jobs for thousands of members across the UK."

The npower workers at the companies Birch House offices in Oldbury have already survived one major jobs cull.

Two years ago 250 of their colleagues lost their jobs when npower closed its Birchfield House and Quayside House offices in the town.

That was part of a major redundancy programme that saw 1,500 jobs cut across the UK, including the closure of npower's major office at Fenton in Stoke and an office in Attwood Road, Burntwood.

And just a year before, the company had closed its high street office building in Kingswinford

That was part of a major redundancy programme that saw 1,500 jobs cut across the UK, including the closure of npower's major office at Fenton in Stoke.

And just a year before the company had closed its high street office building in Kingswinford.

At the time it blamed falling energy prices in Europe for the move, which saw it exporting office jobs overseas to call centres in India.

RWE, the German group that owns npower, has previously warned that npower is losing money and customers. With 4.9 million customers it is one of the UK's 'Big Six' energy suppliers.

The latest job cuts will account for a quarter of npower's 9,700-strong UK workforce.

Unions leaders are currently pressing npower's management for details about its plans.

Unite union national officer Kevin Coyne said: "These reports of job losses will be deeply unsettling for npower staff. These are people with bills to pay and mouths to feed and deserve better than finding out via leaks to the media that they could be out of a job next week.

"It is an inexcusable way for the company to treat a loyal workforce which has worked hard to turn npower's record on customer service around in the last year.

"We will be demanding urgent answers and assurances from npower over the coming days as we seek to protect as many jobs as possible."

Shadow energy secretary Lisa Nandy said: "This is terrible news for npower workers and another blow for the energy industry after so many North Sea and solar job losses."