Origin Energy has confirmed it will be cutting its workforce by 850 by the end of the 2013 calendar year.

"We expect to further reduce employee numbers by 350 taking total reductions to 850 by the end of the 2013 calendar year. This will result in more focused operations and a lower cost base in the 2014 financial year,” Origin Energy’s Managing Director Grant King said.

The announcement comes after the company posted a $524 million statutory profit for the half year ended in December, down from $270 million the same time in the prior year.

The 26 per cent slump in profits was attributed  a lower Underlying Profit, a lower gain on items relating to Australia Pacific LNG and a decrease in the fair value of financial instruments, partially offset by a lower impairment of assets.