npower owner to cut 6,700 jobs across Europe

The npower owner RWE has said it is to cut 6,700 jobs across Europe, after predicting a difficult next year in the company’s third quarter results. A spokesperson told ELN […]

Register now!

By admin

The npower owner RWE has said it is to cut 6,700 jobs across Europe, after predicting a difficult next year in the company’s third quarter results.

A spokesperson told ELN the equivalent of this many jobs would be cut but it was unclear exactly what this entails.

RWE has announced its profits (EBITDA – Earnings Before Interest, Taxes, Depreciation, and Amortisation) for the first three quarters of 2013 were broadly similar to last year’s at €6.7 billion (£5.6bn).

However it said this was only down to a “one-off effect” of successfully revising a gas supply contract with Gazprom and said things would be worse in 2014.

The utility firm forecast total profits for 2013 would hit around €9 billion (£7.5bn) but predicted this could fall by roughly €1billion next year.

To cut costs, RWE has announced ‘efficiency savings’ of €1 billion (£830m) over the next four years, although it said half of that would be cancelled out by general cost increases. The measures will come on top of efficiency savings already announced by the supplier.

Dr Frederik Dahlmann, Assistant Professor of Global Energy at Warwick Business School said: “This development is in line with several recent announcements by major European utilities and demonstrates the large-scale changes that are occurring in Europe’s energy market.”

He said utilities like RWE had invested in new power plants which “at least for the time being, they can no longer operate in a commercially viable way” as the recession in Europe had led to “stagnating demand”.

Big European suppliers had underestimated the way renewable energy generation could elbow out fossil fuel plants because they are “legally given precedence to the grid” and also suffered from “much reduced income stream from their nuclear power” after the German policy u-turn since the Fukushima accident, he added.