As a cost cutting measure, PSA Peugeot Citroen is planning to shift its Paris headquarters to a location in the suburb of Poissy, where the company has a factory, Bloomberg reported, citing unnamed sources.

The office at Avenue de le Grande Armee houses around 1,500 employees working for the automaker's finance and administration departments. Peugeot pays around EUR50m (US$62m) annually in rent and operating expenses.

Around 500 of these employees will not shift to Poissy site. A new HQ would be set up set up for them in Paris.

The plan to move has been presented to the company's supervisory board and unions will discuss the proposal in January 2015. If approved, the move is expected to be completed by the end of 2016.

Jean-Baptiste Thomas, a Peugeot spokesman, said, "We've launched a study to evaluate several options to better manage our real estate assets and improve the working conditions of our employees" at the headquarters. "No decision has been made yet."