The company, which has over 5,000 staff, serving 13.6million customers across London and the Thames Valley, said the majority of the posts would be in support functions and that customers would see no reduction in services.
Chief executive David Owens said redundancies had always been planned since Thames Water came under new management at the end of 2006, but that the recession had forced the company to accelerate its plans.
"We have been concentrating on delivering the highest quality drinking water and most efficient water and wastewater services to our customers, representing excellent value for money. We are now reporting our best ever operational performance, and have managed to bring our running costs under control. At the same time, we have been planning a remodelling of the business, to be rolled out this year, which will allow us to meet future challenges.
"A number of redundancies had always been planned as part of this restructuring process, however, the recession, which is reducing our revenue, and driving up borrowing costs, has meant that we have had to bring this redundancy programme forward. This should allow us to reduce running costs while maintaining our services to customers," he said.
The positions cut will be from all areas of the business, with the bulk of redundancies from support services in Reading and Swindon.