The German-owned firm, which employs 6,300 workers in the UK, said actual redundancies will be “considerably lower” because of the number of employees who leave every year.
Chief executive Paul Coffey said the retail energy market was “incredibly tough”.
He added: “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.”
Unions will be fully consulted over the proposals, starting in early February, said npower.