Npower, the UK arm of Germany utility RWE, said it will outsource much of its customer service and back office functions to India. TCS will oversee around 1,000 back-office jobs in India.
The roles being outsourced to TCS over the next eight months includes largely administrative activity, such as checking meter readings against customers' bills.
British firm Capita is the front-runner to provide front office customer management and some back-office services from February 2014, for a contract worth around 120 million pounds over seven years. About 540 existing Npower staff will be transferred to the company.
Around 1,460 UK jobs will be cut as part of a major corporate restructuring and outsourcing is aimed at helping Npower cope with peak hour demands. "Today we have set out our proposed vision of how we would improve customer service, calling on the support of leading retail outsourcing partners," said NPower chief executive Paul Massara.
"This restructure is necessary if we are to deliver the levels of service our customers deserve. All calls would still be answered in the UK. We would have the flexibility to keep call waiting times down during busy periods and continue to keep costs down so we can keep bills down," he added.
Npower ranks among the "Big Six" British energy suppliers and had announced an average rate increase of 10.4 per cent in October. The biggest impact of the redundancies will be felt at NPower's offices in Stoke-on-Trent, central England, the closure of which will affect around 550 employees.
"I understand that these changes would be incredibly hard for some of our employees and we'll be doing everything we can to support them over the next few months," Massara said.
Workers union Unison claimed the decision would backfire on the company.
"These so called savings will backfire on the company who have consistently let their customers and staff down by not investing enough in the workforce, technology or in the latest customer service techniques," said a spokesperson.
RWE NPower currently employs around 11,000 people across the UK, with 9,500 in the retail business. RWE has already said it will cut 6,750 jobs across Europe between 2014 and 2016.