RWE has confirmed it will make 2,400 job cuts at Npower, after the big six firm notched up an operating loss of €137m (£106m).
The German energy giant blamed "fierce competition", customer services issues and "operational and technical problems" for poor performance at its UK subsidiary NPower - which lost 350,000 customers in a year.
Npower said the job losses would be among both its directly employed staff and contractors.
Paul Coffey, chief executive of Npower, said the results showed "a business that tried to do too much, too soon while not focusing enough on the fundamentals in a constantly changing market.
"This led to over complicated processes and procedures resulting in unhappy customers, too many complaints and extra costs to put things right."
Yesterday it was revealed that the firm was intending to cut around 2,500 jobs in the UK, equivalent to 20 per cent of its workforce.
Npower missed its "moderate" forecast and closed the year under review, after the number of customers slid from 5.13m to 4.77m.
"The main reason for this is serious process and system-related problems in customer billing," RWE said. "Substantial earnings shortfalls also stemmed from the fact that residential and commercial customers switched providers or we were only able to retain such customers by offering them contracts with more favourable conditions. In addition, there is an increasing trend towards saving energy, which also hit us harder than expected."
As a result, Npower is being "radically" restructured and "may face additional burdens", chief executive Peter Terium said.
This will result in savings of €2.5bn, which "should be fully felt from 2018".