British Gas will axe 500 jobs and shut its loft and cavity wall insulation business.
The company, which is a Green Deal provider, said it was making the announcement after its parent company Centrica announced a strategic review in 2015.
In July 2015, Centrica said it would implement an efficiency programme that would cost around £500-£600m and would result in a net reduction of around 4,000 staff by 2020.
The Daily Telegraph reported the job cuts would take place across the UK, with around a fifth coming in Leeds.
British Gas chief executive of energy supply and services Mark Hodges said: “We are focused on improving the efficiency and effectiveness of our organisation to meet the changing needs of our customers. British Gas is well positioned to grow, but we must ensure that our costs allow us to be competitive for our customers.
“I recognise that this will be difficult news for the employees who may be affected. However, I believe today’s announcement is in the best long-term interests of the business. Our priority is to support all those potentially impacted, and to ensure a fair and transparent consultation process.”
GMB described the news as a “real sickener” and said the government would need to revise its carbon emission targets as a result of job losses in the insulation sector.
GMB national secretary Brian Strutton said: “At the end of last year we went through a reorganisation which we were told was to make that business competitive and everyone thought that was behind us.
“But it seems while we were doing that the company was hatching secret plans to shut the whole operation down. Staff will feel gutted and we will think twice about believing anything the company says now.
“British Gas was playing a significant part in tackling cold homes and improving energy efficiency. Now the government will need to look at revising it’s carbon emission targets as a result of these and other job losses in the insulation sector.”