British Gas owner Centrica has said it will cut 1,300 jobs over the next two years as part of its ongoing turnaround efforts.

The energy firm announced this morning its plans to axe a further 800 jobs on top of the 500 announced last month.

It is proposing to axe around 500 contact-based jobs in its customer operations team, alongside cuts to offshore outsourced support jobs.

Centrica said the overhaul of its customer services forms part of its ‘transformation programme’, which includes a 'targeted deployment of AI tools' and a change in customer behaviour supported ‘more efficient operations’.

The energy supplier also said it plans to reduce roles within its group support functions to make them more efficient.

The job losses will lead to an approximately 14 per cent reduction in Centrica’s customer operations team.

Centrica pointed to a 20 per cent year-on-year drop in the average contact per customer year, with around 90 per cent of customers using digital channels.

‘In response to these structural changes in customer behaviour, we have been managing resource levels through natural attrition,’ it said.

It came as the firm reported an 18 per cent drop in adjusted core profit for the six months to 30 June, primarily due to the impact of Spirit Energy asset disposals and production outages.

The warmer weather and weaker market conditions also added to pressure on its margins.

Centrica raised its dividend by 9 per cent to 2p. 

Chief executive Chris O’Shea said: ‘Volatility across energy markets has created challenges in some parts of our business, and some of our delivery has been slower than we would like.

‘However, we have continued to invest with discipline to strengthen our portfolio and support long-term growth, making progress pivoting the Group towards more stable and predictable earnings.

‘There is still much more to do, and by remaining nimble and bold, we can deliver our ambitious long-term targets.’

Centrica shares fell 2.6 per cent to 175p.

The energy giant said it welcomed Andy Burnham’s recent announcement to remove VAT on household bills but renewed calls for a targeted support scheme for lower-income customers.

‘It is crucial that Ofgem now works closely with the Government to ensure that the necessary policy and funding decisions are in place,’ it added.