British Gas is to axe 500 jobs, hitting its loft and cavity wall insulation business, as part of the company's efficiencies programme.
Unions described the announcement as a "sickener", saying staff affected by the news felt "gutted".
The jobs are part of 6,000 cuts announced by owner Centrica last summer, with the group saying it had to be competitive in a "fast-changing" energy market.
Mark Hodges, chief executive, energy supply and services, UK and Ireland at British Gas, 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."
Brian Strutton, national officer of the GMB union, said: "This is an early stage of the programme of 6,000 job losses announced by parent group Centrica last summer.
"GMB expects a further 4,000 job losses still to come in areas that have yet to be identified.
"The closure of the loft and cavity wall business with a loss of 500 jobs is a real sickener.
"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 its carbon emission targets as a result of these and other job losses in the insulation sector."
Unison union general secretary Dave Prentis said: "It is disappointing that British Gas are cutting yet more jobs around the country. This comes at a very uncertain time for those working for the company. It is important that the business now continues to engage fully with the unions to try to cushion the blow of this sad news.
"Unison will work with senior managers to seek to avoid any compulsory redundancies and to support workers who might be transferring to other roles.
"We expect British Gas to be flexible in finding the right solutions for those whose jobs are at risk because it is the workforce that has helped make the business so profitable."