SWINDON-based energy supplier N-Power has announced it will cut 900 jobs in the UK.

The company made the decision to axe 15 per cent of its 6,300 workforce citing "extremely tough" conditions in the UK energy retail market and a price cap on tariffs.

The news comes soon after a merger between the supplier's retail business with Scottish Southern Electric which was scrapped in December after years of negotiations.

A spokesperson for Npower told the Adver that no decision had be made about where the cuts would be made or whether they would fall on staff working at the headquarters on the Windmill Hill Business Park.

Npower CEO Paul Coffey said the price cap introduced last month had impacted on the firm's profits.

“The retail energy market is incredibly tough," he said, "Ofgem itself forecasts that five of the ‘Big Six’ energy companies will make a loss or less than normal profits this year due to the implementation of the price cap, and with several recent failures of new energy suppliers, it is clear that many have been pricing at levels that are not sustainable.

“Even with these reductions, we still forecast significant losses this year, but we’re doing everything we can to minimise them whilst continuing to focus on service and value for our customers.”

The cap took effect on 1 January to protect consumers who might be overcharged by their supplier, in particular, by default tariffs which customers roll onto when their fixed-price contract ends.

Ofgem has said it expects the savings to be around £1bn for consumers, but the move could potentially make a significant dent in large suppliers’ revenues.

After the failed merger, which followed soon after the announcement of the price cap, ownership of the business is to be transferred to German giant E.ON as part of a complex asset swap between Innogy and the rival German energy company.

There are fears this could lead to more job losses when the transfer takes place later this year.

Laura Gratis, a spokeswoman for the GMB union, said: "Just a few months ago Npower was involved in causing great uncertainty to the workforce by announcing that it was involved in merger talks with one of the other "Big Six" energy companies. That merger failed.

"Now Npower is announcing major job reductions which is understandably worrying for our members, their families and indeed local communities where our members live in."