Energy giant Npower is to close most of its eight UK sites threatening thousands of jobs.
Unions have described the move as a “body blow”, coming just weeks before Christmas.
The company, which has 5,700 staff, is in “a critical and unsustainable business situation”, according to its owner innogy, which is part of German-based E.ON.
It described the UK market as “facing unprecedented challenges”.
Many of Britain’s big suppliers have been hit by increased competition from smaller players as households switch providers.
Under the shake-up Npower’s domestic and small business customers will be dealt with by E.ON UK customer services.
Innogy said this would “create substantial synergies from running a single customer service platform rather than two”.
It added: “The remaining Npower operations would be restructured over the next two years.
“This would include the closure of the majority of Npower’s sites and corresponding staff reduction.”
Npower has eight sites at Oldbury in Gloucestershire, Hull, Leeds, Birmingham, Solihull, Sunderland, Swindon and Worcester.
No indication has been given by the firm which of these will be spared by the cull.
However, the announcement does not impact Npower’s profitable industrial and commercial customer business which is considered to be carved out.
This is dealt with by Solihull and Oldbury and so these could be safe.
Leonhard Birnbaum, chief executive of innogy SE said: “The question of how to improve the performance of our retail business in the UK, Npower, has been a key issue for the past few years.
“I want to express my sincere thanks to our employees for their unceasing dedication to delivering a great service to our UK customers in a very challenging market.
“We know that this is bitter and surprising news for many of our Npower employees and we are well aware of our responsibility towards our employees in the months ahead.”
He added: “What became clear to the Npower board and ourselves is that Npower with its structural set-up and scale was not able to succeed by itself in this difficult market.
“Together with E.ON, we now propose to reduce the cost of serving Npower customers by combining them onto one platform, an option that simply was not available in the past.”
Johannes Teyssen, chief executive of E.ON said: “The UK market is currently particularly challenging. We’ve emphasised repeatedly that we’ll take all necessary action to return our business there to consistent profitability.
“For this purpose, we’ve put together proposals and already begun discussing them with British unions.”
A GMB spokesman said: “Clearly this announcement will be a body blow to Npower workers across the UK.
“The government has to urgently wake up to the impact that the price cap is having on good and reasonably well-paid jobs in UK energy companies.
“Npower is a poorly managed company with significant losses in the UK but it’s always the workers that face the brunt of poor management coupled with regulation that sends work overseas whilst sacking energy workers in the UK.”
Unison general secretary Dave Prentis said: “This is a cruel blow for Npower employees. They’ve been worried about their jobs for months. Now their worst fears have been realised, less than a month before Christmas.
“The UK energy market is in real danger of collapse. If nothing is done, there could soon be other casualties.
“Npower’s demise means there’s no time to waste. It makes the powerful case for bringing the retail arms of the Big Six energy firms into public ownership.
“This would preserve jobs, ensure customers get a better deal and allow the UK to meet its carbon neutral targets.”