More than 500 British Gas workers in Southampton face redundancy after bosses announced they will be shutting the city's call centre.

Workers were gathered this morning to be told the news that the centre in St Mary's Road will be closed by the end of the year as part of a cost cutting review.

Around 600 people work at the British Gas operation at Dorset House including 550 people in the call centre that handles enquiries from across the country.

A 90-day consultation period on job losses has been launched.

British Gas said it was dealing with more customers through digital channels and needed to reduce costs to remain competitive and offer best prices.

In a statement the firm said: “We have therefore reviewed resource levels in our energy business, and are now proposing to close our Southampton contact centre at the end of 2012 leading to a reduction of 550 roles.

“If the proposals go ahead 50 customer services roles currently sited at Southampton may transfer to our site at Chandlers Ford.

“We will work to ensure continued high levels of service for our customers as we now move into a consultation period to discuss these proposals in more detail with our people and their representatives.”

British Gas said profits from supplying gas and electricity to residential homes fell 30 per cent last year to £522million – around £52 per household – due to a mild spring an autumn.

British Gas hiked electricity and gas prices by 16 and 18 per cent rise in August although has since cut electricity prices by five per cent.

Council leader Royston Smith said: “Southampton City Council will do everything it can to support British Gas staff at this very difficult time.

"Helping our residents into employment is a top priority for the city, and we are already pulling together a taskforce of council officers with employment and skills expertise and partners including JobCentre Plus and other agencies to respond to today’s news.”

City MP John Denham said: “This is bad news for Southampton. I am deeply disappointed at the loss of so many longstanding jobs.

"This will undoubtedly have an impact in and around Southampton, and I very much hope all those who are facing redundancy are given the support they need from British Gas.”