It's not just the 300,000 people who could lose their jobs over the next couple of years who need to worry. As the economic slowdown bites, many employers will be looking to cut their staff costs in other ways.

Perks and benefits are already under pressure, particularly among financial services companies that have been hit directly by the credit crunch. HSBC recently rejigged its pension arrangements to force staff in its old defined-benefit scheme to make contributions, for the first time.

Retailers are also under pressure and Marks & Spencer is unlikely to be the last to tighten employment policies. Whether slashing its redundancy terms will be worth the hit to morale is less clear. At BP, it is more self-inflicted wounds that are behind its cost-cutting drive. And you can't help wondering whether by scrapping its nine-day fortnight policy it will shoot itself in the foot again.

The present practice allows employees to work additional hours in return for an extra day's holiday every two weeks for the same pay - the so-called compressed working week. Some companies also offer staff the option to take a 10 per cent pay cut in return for the extra day's holiday without increasing their hours.

The decision by BP to scrap the practice goes against the flow in recent years, during which many companies have adopted more flexible working hours. Most companies claim that they are happy with the results in terms of productivity, recruitment and retention. PricewaterhouseCoopers introduced the compressed working week in 2000 and believes that it has been a big benefit in terms of staff retention.

The CBI's most recent employment trends survey shows a jump in the number of companies offering flexible work options. And government surveys show that companies think that more flexible working has boosted productivity.

Not all companies are convinced of the benefits of the nine-day fortnight however. Ernst & Young believes that the practice is not compatible with a client business in which staff need to jump when clients snap their fingers. Instead, E&Y offers staff the option to work one day a fortnight from home.

BP inherited the practice from Amoco, the American company that it bought in 1998, but it has not been adopted throughout the organisation. The move to scrap it partly reflects a desire to have one policy across all parts of the business.

But the decision to average down rather than up will cause some red faces in Whitehall. In 2003, BP's policies, including the compressed week option, won praise from Patricia Hewitt, then the Industry Secretary. She expressed hope that other companies would be inspired to follow its lead. Or, perhaps not.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive