The energy giant said it will make “extensive cost savings” to help turn around the “significant” losses made in 2015 and return the company to profitability.
The job losses, over the next two years, will be spread across its sites and amount to just under 21 per cent of its workforce.
Unions described the job losses as a “devastating blow”, blaming the company’s woes on “poor decision-making at the very top.”
The German-owned company said its 11,500 employees will be reduced by 2,400, through a mix of those who work directly and indirectly for npower.
Some 670 staff are employed at its long-term base in Scarcroft, a 20 minute drive from Leeds city centre, and another 557 at Limewood.
It is already public knowledge that Scarcroft, where a large number of telesales and smart metering programme staff are based, is due to close when its lease is up in 2018 and staff will be offered the opportunity to relocate to Limewood, also a short drive from Leeds.
It is understood the job losses will impact more on indirectly employed staff.
A spokesman said this morning: “Yorkshire, the North East and the Midlands will still be three hubs and will still be our heartlands where we base our employees.
“In two years time that will still be the case.”
The Big Six energy provider revealed nearly 355,000 customers - seven per cent of its customer base - had abandoned the firm after long-running problems with its IT billing system and poor complaints handling, which landed Npower with a £26m fine from regulator Ofgem in December.
The £99m loss compares to the profit it made of £183m for the previous 12 months.
But Npower said it was beginning to see improvements in its customer service, with complaints per 100,000 customers more than halving last year - with progress picking up towards the end of the year.
It insisted that by the fourth quarter, customer complaints were below the industry average.
Paul Coffey, chief executive of RWE npower, said: “Npower results continue the trend seen earlier in 2015, but they are nonetheless extremely disappointing and we are starting a two-year process to fix them.”
He added that overhauling the group will be a “huge task” and insisted the job losses confirmed alongside its results will “protect the thousands of jobs that will remain”.
Unison general secretary Dave Prentis said: “These huge job losses will come as a devastating blow to the workforce.
“Npower has been in trouble for some time thanks to poor decision-making at the very top, and workers are now paying the price. The company’s failure to invest properly in new systems has left it with one of the worst customer service records in the business.”
Unite, which represents meter readers, revenue protection officers, gas fitters and electricians, warned npower against “self-defeating” cuts.
The job losses include 450 recently announced by npower in the firm’s home and social team with the first tranche of redundancies expected at the end of this year, followed by more at the end of 2017, said the union.
Talks on the detail of today’s announcement are expected to take place between unions and npower over the coming weeks.
Unite national officer Kevin Coyne said: “Confirmation of these job losses on this scale is a bitter blow for workers, their communities and the wider energy sector.
“Npower’s ability to repair its tarnished image and keep the lights on for its customers will hinge on a workforce which has worked hard over the past year to turn the company around.
“They should not be made to pay for the company’s past mismanagement with their livelihoods and we would urge npower not to cut too far, too fast and lose vital skills which could undermine it in the long term.”