DUESSELDORF, Germany (Reuters) - RWE <RWEG. DE>, Germany's No.2 utility, will be cutting some 2,500 jobs in its power generating business in Germany over the next few years, a source familiar with the plans said on Wednesday.

In a bid to cope with tepid energy demand in Europe as well as loss-making power plants, RWE would also cut jobs in power stations in Britain and the Netherlands, the source said.

According to information obtained by Reuters earlier, some 3,400 jobs may be going in total.

RWE spokespeople declined to comment on the matter, referring to the company's nine-month results due on November 14 when more details will become available.

In addition, RWE is also planning to halve the number of employees at its renewable energy unit Innogy, which currently employs 1,500, German business daily Handelsblatt reported, citing company sources.

An Innogy spokeswoman confirmed there was a restructuring programme underway, but added that most of the employees leaving the unit would continue to work in other parts of RWE.

Along with peers E. ON <EONGn. DE> and EnBW <EBKG. DE>, RWE has been hit hard by a steep drop in wholesale power prices and a boom in renewables that has driven conventional power plants into loss. It is seeking to make savings and shed assets.

One of the leading European energy companies in exploration, production, transport and trading, it could cull 10,000 out of 70,000 current jobs overall, analysts estimate.

Its German power production sites employ 14,500.

In response to falling revenue, RWE has been slashing investments and announced planned closures of power plants to turn its business around and lower a 35 billion euro ($47.16 billion) debt pile.

Chief Executive Peter Terium has said savings must exceed an already planned 500 million euros in power generation and there will also be a reorganisation of its electricity sales business.

(Reporting by Tom Kaeckenhoff; Writing by Vera Eckert and Christoph Steitz; editing by Jason Neely and Keiron Henderson)

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