Energy giant Npower is to close most of its eight UK sites, leading to the loss of around 4,500 jobs.

Unions have described the move as a "body blow", coming just weeks before Christmas.

The company, which has 5,700 staff, is in "a critical and unsustainable business situation", according to its owner innogy, which is part of German-based E.ON.

It described the UK market as "facing unprecedented challenges".

Image: Many of Britain's major suppliers have been hit by increased competition from smaller players

Many of Britain's major suppliers have been hit by increased competition from smaller players as households switch providers.


The "big six" companies have also been strongly critical of the energy price cap, which they argue has led them to suffer unnecessary financial losses, following its introduction in January.

Under the shake-up Npower's domestic and small business customers will be dealt with by E.ON UK customer services.

Innogy said this would "create substantial synergies from running a single customer service platform rather than two".

It added: "The remaining Npower operations would be restructured over the next two years.

"This would include the closure of the majority of Npower's sites and corresponding staff reduction."

Sky News understands the centres facing the axe are at Houghton-le-Spring near Sunderland, Hull, Leeds, Worcester and Swindon.

Its other sites at Oldbury, Birmingham and Solihull are not threatened with closure under the plans.

The announcement does not impact Npower's profitable industrial and commercial customer business which is considered to be carved out.

E.On UK chief executive Michael Lewis told Sky News that over time the Npower brand would disappear - though not immediately.

He told Sky's Ian King Live: "Npower is a business that has been losing money for many years.

"The price cap has had a very detrimental effect on the whole of the energy sector and the business is not sustainable."

Image: Npower has said the majority of its eight sites will shut as a result of the move

Leonhard Birnbaum, chief executive of innogy SE, said: "We know that this is bitter and surprising news for many of our Npower employees and we are well aware of our responsibility towards our employees in the months ahead."

He added: "What became clear to the Npower board and ourselves is that Npower with its structural set-up and scale was not able to succeed by itself in this difficult market.

"Together with E.ON, we now propose to reduce the cost of serving Npower customers by combining them onto one platform, an option that simply was not available in the past."

Johannes Teyssen, chief executive of E.ON, said: "The UK market is currently particularly challenging. We've emphasised repeatedly that we'll take all necessary action to return our business there to consistent profitability."

A GMB spokesman said: "Clearly this announcement will be a body blow to Npower workers across the UK.

"The government has to urgently wake up to the impact that the price cap is having on good and reasonably well-paid jobs in UK energy companies.

"Npower is a poorly managed company with significant losses in the UK but it's always the workers that face the brunt of poor management coupled with regulation that sends work overseas whilst sacking energy workers in the UK."

Image: E.On chief executive Johannes Teyssen says the UK market is 'particularly challenging'

Unison general secretary Dave Prentis said: "This is a cruel blow for Npower employees. They've been worried about their jobs for months. Now their worst fears have been realised, less than a month before Christmas.

"The UK energy market is in real danger of collapse. If nothing is done, there could soon be other casualties.

"Npower's demise means there's no time to waste. It makes the powerful case for bringing the retail arms of the 'big six' energy firms into public ownership.

"This would preserve jobs, ensure customers get a better deal and allow the UK to meet its carbon neutral targets."