Npower, which is owned by the German energy giant RWE, employs 11,500 people in the UK and is one of the country's big six gas and electricity suppliers.
The BBC understands sales and marketing roles will be the worst hit.
The company, which has not made any official comment, posted a loss of £48m for the first nine months of last year.
It has lost about 200,000 UK customers and received the most complaints of the six biggest energy suppliers in 2015.
RWE will announce Npower's full-year results on Tuesday when it is expected to detail the planned job losses.
The cuts come as RWE, which generates energy as well as supplying it, has been hit by oil and gas prices falling more than a third in the last year.
And in December, Npower was ordered to pay a settlement of £26m - the biggest such payment ever demanded by UK energy regulators - for sending out inaccurate bills and failing to deal with complaints correctly. The money was split between charity and affected customers.
Unison general secretary Dave Prentis said: "These huge job losses will come as a devastating blow to the workforce."
The cuts will "leave the already struggling business in an even worse state" and lead to "months of uncertainty" for staff, he went on.
Eamon O'Hearn of the GMB union said: "Many hard-working staff have already been outsourced and so any further job losses for directly and indirectly employed staff would be another kick in the teeth for communities."
The Unite union's Kevin Coyne said the reports of job losses would be "deeply unsettling" for staff.
"It is an inexcusable way for the company to treat a loyal workforce which has worked hard to turn Npower's record on customer service around in the last year," he added.
Npower's headquarters are in Swindon and most of its UK employees are in central and north east England and in Yorkshire.
One worker from the sales team, whose anonymity the BBC has protected, said he was not surprised to hear that job losses are likely to be announced this week. He claimed that he had been told to look for other jobs since December, when the £26m settlement was ordered.
"We have also been told repeatedly that announcements regarding our jobs were coming," he said.
"But I'm still angry with Npower because they've been so secretive. They keep saying that we're a family and that they will be open with us. Meanwhile they're saying something else behind our backs."
Last month, the company announced a 5.2% cut in its gas price, taking effect on 28 March - a £32 average annual reduction to customers on a standard domestic tariff.
Like other energy suppliers, it is under pressure from ministers and consumer groups to lower energy bills for customers amid the rapid decline in oil and gas prices.
The news on job losses also comes days before UK competition regulators unveil plans to make the energy market more transparent for consumers.
Labour's energy secretary Lisa Nandy said: "This is terrible news for Npower workers and another blow for the energy industry after so many North Sea and solar job losses."
Energy firm Npower is to cut up to 2,500 jobs, more than a fifth of its UK workforce, with an announcement to staff expected this week.