E.on to shed 500 jobs ahead of energy price cap ‘challenges’

ENERGY supplier E.on UK has said it will cut around 500 jobs from its British workforce ahead of the Government’s looming price cap on the sector.

The UK arm of the German energy giant E.on is hoping to make £100m worth of savings to shore up its finan- cial position against the energy market’s “unprecedented” march of change.

Michael Lewis, the boss of the Big Six supplier, said that there were “numerous challenges” across the energy market, “not least the forthcom- ing price cap”.

The Government’s plan to cap standard energy tariffs from this winter risks a major earnings crunch for suppliers which are already under pressure due to surging energy market costs and fierce competition.

Mr Lewis said the voluntary redundancies will affect only the noncustomer-facing roles within the company’s 9,400-strong workforce.

He said: “This is one element of our ongoing transformation which, in total, will help us achieve savings of around £100m across our mid-term plan. We’ve undertaken a rigorous review of our options to ensure we keep costs as low as possible, become a more agile organisation and remain a sustainable business in the UK.”

E.on UK currently provides gas and power to just under 4m homes, of which 42pc are on a standard variable tariff which will fall under the Government’s energy price cap. British Gas has around 3.5m customers on a standard tariff and is most exposed to the squeeze.

British Gas’s parent company Centrica expects about 4,000 job losses, while its rival SSE has chosen to leave the market altogether by spinning off its supply business to merge with Npower, with the company concentrating on generation and transmission work.

The curb on energy bills will strike a blow at the heart of the industry as it scrambles to keep up with wider changes in the market.

Mr Lewis said E.on needed to “reinvent” the supplier “for the new energy world; where self-reading smart meters give customers more accurate bills and greater knowledge about their energy, and a wide range of solutions such as solar, storage and emobility put customers more in control of their energy”.