British Gas has confirmed that it is to cut 2,000 jobs at sites in Manchester, Oldham and Solihull.
British Gas has lost 445,000 customers since the start of 2005
Up to 1,000 of these back office jobs will be outsourced to India, a British Gas spokesman told BBC News.
"With new billing systems, we will not need anything like the number of back office data processors," the spokesman added.
The Unison union called the cuts "completely unacceptable" and warned that they may lead to strike action.
"No-one should be fooled that these savings will go towards reducing customer's bills or improving services," the union said.
"This is a devastating blow for the North West and West Midlands," the GMB union added.
Job losses are unlikely this year, the company said in a statement, adding that it was still in consultations with unions.
Call centres safe
This will be the company's first move to outsource work to India, but British Gas - owned by Centrica - was keen to stress that its customer service division would not be affected.
The British Gas spokesman said: "We have no plans at all to offshore any of our call centre work, we remain entirely committed to existing UK call centres."
In recent years, thousands of UK jobs, particularly call centre posts, have been shifted to low-cost, offshore centres such as India.
But in British Gas' case inquiries from its 18 million customers will continue to be handled from the UK.
In its statement, the energy company said a number of data processing and administrative jobs are likely to become redundant as it switches to a more streamlined customer billing system at a cost of £430m ($750m).
"We have an agreement with British Gas that they must consult the unions on their plans before any final decisions are made," said Unison.
The union added that it would fight management all the way to stop the job cuts.
British Gas currently employs about 26,000 workers across the UK.