Npower, one of Britain's biggest energy suppliers, will outline plans this week to axe thousands of jobs as its German owner attempts to revive the company's weak financial performance.
Sky News has learned that Npower will tell staff in the coming days that approximately 2,500 roles at the company and its partners are to be axed.
Sources said the proposals were still being finalised, with some of Npower's directly employed workforce of 7,500 at risk and the remainder of the cuts taking place at internal suppliers elsewhere in the RWE group and at outsourcing partners.
Including indirect employment, Npower's operations support about 11,500 jobs in the UK - meaning that its workforce is braced for a reduction of over 20%.
The grim news will be delivered just days before competition regulators announce a series of measures aimed at making the UK's energy market more transparent.
Npower, which is part of the German utility RWE, and rivals such as British Gas and SSE have announced a round of price cuts in recent months, but have been criticised by ministers and consumer groups for failing to go further.
The rapid decline in oil prices during the last year has prompted calls for much bigger cuts.
Npower said last month that it would reduce gas prices for residential customers by just over 5% on 28 March, equating to a £32 annual bill cut for households using a standard domestic tariff.
Npower's plans to cut so many jobs will ignite concerns about its ability to improve a customer service record which is already judged to be among the worst in a tarnished industry.
Insiders pointed, however, to the beginnings of a turnaround in its performance, with the number of complaints halving in 2015.
Last year, RWE ousted Paul Massara, Npower's former boss, and installed Paul Coffey, the British company's chief operating officer, in his place.
The management changes followed a decline in Npower's customer base following a string of billing problems.
In December, the company was ordered to pay a £26m settlement by the energy regulator, Ofgem, for "failing to treat customers fairly" - the second such fine it has had imposed on it.
Npower now has roughly five million customers, making it the smallest of the "Big Six" suppliers.
The company lost £48m in the nine months to the end of October, largely as a consequence of the billing system problems.
The job cuts will be the latest piece of bad news affecting RWE in the UK, following last month's accident at the power station it owns in Didcot, Oxfordshire, which is thought to have left several people dead.
The redundancies at Npower are unrelated to the Didcot tragedy.
It is not only in Britain that RWE, Npower's German owner, has been experiencing challenges.
It announced last month that it was scrapping its full-year dividend, blaming sliding earnings from its electricity generation business and the changing political sentiment towards nuclear power in its home market.
The dividend move will save around €600m (£464m).
RWE will announce annual results on Tuesday, and is expected to set out further details of its plans for Npower alongside them.
Two days later, the Competition and Markets Authority (CMA) will unveil its final proposals arising from a two-year inquiry into the energy sector.
Npower declined to comment on Sunday.
By Mark Kleinman, City Editor