Hilton Hotels Corporation (HHC) — part of the Blackstone Group — is embarking on a US$250m (£175m) cost-cutting programme to counteract the negative effects of the current economic climate.

Christopher Nassetta, CEO of the US hotel giant, has already authorised the closure of its corporate headquarters in Beverly Hills, CA, where 1,000 workers are employed.

Plans to relocate to Maryland or Virginia, Washington DC, during the third quarter of 2009 will help towards the financial strategy and create 300 full-time jobs in the area.

Nassetta explained: “Relocating to the DC area will significantly reduce our operating expenses and will position Hilton in a more central location from which to operate a global business, ease coordination across our organisation, and better enable us to execute on strategic opportunities.”

In response to speculation that Hilton’s UK headquarters in Watford, North London, will become a European centre, resulting in half of the 500 staff possibly losing their jobs, a company spokesperson said: “HHC is undergoing a corporate transformation exercise and any changes within the organisation will be communicated directly to our team members at the appropriate time.

“It is however important to highlight that we still plan to double the estate in Europe from 165 hotels to over 300 hotels in the next 5—10 years, and that Watford will remain our key European Headquarters.”