In already challenging times, a recent statement that announced the merger of E.ON’s Industrial & Commercial Unit with the Business Solutions division of Npower has worried thousands of employees across both companies.
As per the proposed expansion, Npower’s Business Solutions division would combine with E.ON’s industrial as well as commercial activity across the United Kingdom. This integration is targeted to be completed by December 2021. The Chief Executive for E.ON UK and Npower, Michael Lewis, stated that while these are two complementary companies, their merger would create a diverse experience across various market areas.
For British businesses, it means an increased ability to provide more personalised and smarter support for improving efficiency and reaching net-zero targets.
Plans on how the businesses would be merged, including their working locations and the roadmap for migration of customers to a single IT system, are underway. E.ON announced another deal earlier in 2020 with Kraken Technologies, which is an Octopus Group company. As part of this deal, it would migrate all its customers to the Kraken platform within a year. This was touted as E.ON’s next platform that the company was on the path of building.
Just last year, Npower was acquired by E.ON. This move caused a major restructuring within npower to over 4,500 job cuts announced a couple of months before the Christmas holidays. This also had a major negative effect on E.ON’s financials for the year, including a 49% decrease in net income for 2019.
Ever since the acquisition, Npower’s Business Solutions arm continued to function independently. Based on E.ON’s official statements, the merger of these 2 businesses is what would help UK companies access a wide range of energy solutions and expertise.
Npower announced its decision to restructure its business in the UK around December 2019. This led the company to receive widespread criticism, especially since it was close to Christmas. Certain union officials described the move as a ‘body blow’ to employees. Several call centres were also closed as part of the restructuring and left hundreds of people without work.
The company described the move as part of its ‘ambitious’ efforts to cut costs, without impacting customers and that it is part of their plan to create leaner and more digital processes to enhance the customer experience. During that time, the then General Secretary for Unison, Dave Prentis, warned that the energy market of the UK was at a higher risk of collapsing. Npower could be the first of many causalities if steps were not taken.
He also called for public ownership of the retail segments of the Big-6 energy companies. This move would help to protect jobs, provide a better chance of meeting the government’s net-zero targets and help consumers get affordable deals.
The business supply division ofNnpower was initially left out of merger details, after its domestic divisions were themselves merged as part of the parent company’s asset swap. As E.ON, it now makes sense to bring it all under a single roof. Mike Lewis said that the merger of 2 big Commercial and Industrial units as a single entity would create one of the biggest B2B energy businesses in the country.
Npower’s earlier restructuring moves were also preceded by months of speculations and tension among workers about their job security. As the company merges both the businesses and migrates to a single system, there is no clarity yet as to how many jobs are again at risk due to the potential duplication of roles.
Due to the coronavirus outbreak, the job market is already increasingly tough in the UK and around the world. As unemployment increases across the UK with the economy shrinking further, more job losses, especially in the energy sector, would bring more worrying news to those employed in it. It remains to be seen what the true impact of this move would be on staff and how many more would lose their jobs.