"We are talking about job cuts," Chief Financial Officer Thomas Kusterer told journalists at the group's annual press conference, declining to say how many of EnBW's workforce of around 20,000 would have to go.

"We have already signalled last year that the environment would remain difficult. This has materialised much more than we expected," he added.

EnBW and bigger rivals E.ON and RWE have taken massive writedowns on their power plants, most of which only run a fraction of the time required to be profitable as they are edged out of the market by solar and wind power.

EnBW said it would increase its target to make savings of about 400 million euros (£313 million) by 2020, though it did not say by how much.

The company, almost entirely owned by its home state Baden-Wuerttemberg, also proposed a dividend of 0.55 euros a share for 2015, down from 0.69 euros the previous year.

Chief Executive Frank Mastiaux left open whether dividends would fall further in the future, but said market conditions, which have worsened significantly over the past year, would have to be taken into account.

German baseload power for next year, the Cal '17 contract, is currently trading at 22.3 euros per megawatt hour, down more than half since early 2013.

EnBW expects its adjusted core earnings (EBITDA) to fall by a further 5-10 percent this year after declining 2.7 percent to 2.11 billion euros in 2015.

The drop was cushioned by a 50 percent profit rise at its renewable division, which focuses on capital-intensive offshore wind projects.

EnBW last month said it was in talks with investors to sell up to 49.9 percent in its 497 megawatt (MW) Hohe See offshore wind project by the end of the year.

(Editing by Maria Sheahan and Mark Potter)

By Christoph Steitz