While Markov jump systems (MJSs) are more appropriate than LTI systems in terms of modeling abruptly changing dynamics, MJSs (and other switched systems) may suffer from the model complexity brought by the potentially sheer number of switching modes. Much of the existing work on reducing switched systems focuses on the state space where techniques such as discretization and dimension reduction are performed, yet reducing mode complexity receives few attention. In this work, inspired by clustering techniques from unsupervised learning, we propose a reduction method for MJS such that a mode-reduced MJS can be constructed with guaranteed approximation performance. Furthermore, we show how this reduced MJS can be used in designing controllers for the original MJS to reduce the computation cost while maintaining guaranteed suboptimality.