A British Petroleum logo is seen at a petrol station in south London
A British Petroleum (BP) logo is seen at a petrol station in south London.REUTERS

British oil company BP Plc will reportedly be cutting several hundred jobs to scale back on mounting costs and cope with plunging oil prices.

BP is expected to make the announcement on Wednesday. The cuts will probably affect employees working at its London, Aberdeen and Sunbury offices. Most of the cuts are expected in the communications, procurement and legal departments.

Sources told The Guardian that employees working at the company's headquarters at St. James Square and offices at Sunbury in Berkshire would all be affected. The exploration base at Aberdeen is also expected to see major layoffs.

More than 15,000 employees work in BP's UK offices but with crude oil prices falling 40 percent since June, the company is taking major strategic decisions to manage rising costs related to the Deepwater Horizon Spill and plummeting oil prices.

BP doesn't need the back-office jobs now because it has 50 percent lesser offshore fields, lesser pipelines and 30 percent fewer wells after it sold $40 billion worth of assets to compensate for the oil spill accident in the Gulf of Mexico.

"The fall in oil prices has added to the importance of making the organisation more efficient and the right size for the smaller portfolio we now have," a BP spokesman told the BBC.

BP could also freeze some projects and fire some middle managers in its attempts to shore up finances.

"What you'll see with this simplification plan is that headcounts are starting to come down across all of our activities in upstream, downstream and in the corporate centres -- essentially the layers above operations," Brian Givalry, the finance director of BP told The Sun Times.

Also, with most of the back-end jobs being outsourced to India and other regions, BP's U.K. headcount will probably dwindle in the coming months. The global headcount at BP is 84,000 including the U.K. workforce.  

The oil market is currently in a frenzy with prices falling sharply in the past few months. Brent Crude is trading at $68 per barrel and experts say that it could slide further down in the coming few months.

"Without OPEC intervention, markets risk becoming unbalanced, with peak oversupply likely in the second quarter of 2015," Morgan Stanley wrote in a report, according to Reuters.

"With OPEC on the sidelines, oil prices face their greatest threat since 2009, but we expect a volatile 2015 rather than a one-way trade," Morgan Stanley added.

Barclays said that the oil market is faltering and needs to find a balance, which won't be possible if demand for oil does not improve.