BP will cut hundreds of jobs across its global oil and gas business by the end of next year in a $1 billion restructuring programme that was announced on Wednesday following steep falls in oil prices.

The bulk of the costs will go towards staff redundancies in all segments, including oil explor-ation and production, refining and trading and administration, a company spokesman said.

The British oil major said a first charge will be taken in the fourth quarter of 2014 as it implements a plan drawn up over the past 18 months to increase efficiency.

Hundreds of jobs are expected to be cut in BP’s main centres in Britain, the US and elsewhere

“As part of its wider ongoing group-wide programme to simplify across its Upstream and Downstream activities and corporate functions, it expects to incur non-operating restructuring charges of circa $1 billion in total over the next five quarters, including the current quarter,” BP said in a statement.

Hundreds of jobs are expected to be cut in BP’s main centres in Britain, the United States and elsewhere, sources said.

The restructuring charge is part of BP’s cost-cutting drive in recent years that saw it sell over $43 billion worth of assets to cover the cost of the 2010 Gulf of Mexico oil spill as well as the oil sector’s rising costs.

A sharp drop in oil prices, that fell from around $115 a barrel to around $65 a barrel since June, has piled further pressure on BP and its peers as revenues slump.

By 10.18 am, BP shares were down 0.2 per cent at 405.20 pence per share.

BP is also considering further cuts to its 2015 spending programme beyond the $1-$2 billion reduction announced in October, that brought forecasts down to $24-$26 billion.

“This will be reviewed further as part of the 2015 plan, recognising the current outlook for oil prices,” it said.