BP to close Chicago offices and cut jobs

BP is to close offices in Chicago with the loss of significant numbers of jobs, as it begins to implement the cost-cutting restructuring announced last week.

While the oil company's North American headquarters are in Houston, the company employs more than 7,000 in Chicago in a series of offices in the city's suburbs. They include several hundred oil traders, a corporate centre, research facilities and the headquarters of the company's downstream operations in the US.

Staff in Chicago have been told that the oil trading team will move downtown, while the downstream office and research unit will stay put. However, the company intends to move its entire corporate operation, which employs several thousand staff, to Houston, more than 1,000 miles away.

"It is likely that some of our sites in Chicago will close," a spokesman said yesterday. "There will inevitably be some job losses and there may well be people who wish to relocate."

The Chicago operation is a legacy of BP's takeover of Amoco a decade ago, and has long been seen as an obvious target for cost-cutting. Last week Tony Hayward, chief executive, warned employees across the group to expect job losses after his assessment of the company as "materially lagging our peer group in the last three years".

Much of this lag is due to the company's unnecessarily high cost base, Mr Hayward said, with staff overlaps and job duplication a hangover from the acquisitions spree managed by Lord Browne, who stepped down as chief executive earlier this year.

In an email to BP's Chicago staff, Bob Malone, the company's North American chief, said: "Over the next two years, BP in America will consolidate its functional centres [in Houston]. The move will eliminate the cost and complexity associated with maintaining functional centres in Houston and the Chicago suburbs."