DOHA/LONDON- Qatari gas producers QatarGas and RasGas this week began implementing job cuts that had been postponed because of the diplomatic crisis between Qatar and its neighbouring states, sources close to the matter told Reuters on Thursday.

The layoffs had initially been slated for June after the Gulf state's decision to merge the two liquified natural gas (LNG) divisions of Qatar Petroleum.

Qatar Petroleum's CEO has said that the merger of RasGas and Qatargas would help to cut operating costs by hundreds of millions of dollars at the world's largest LNG producer.

Some engineers were given fresh appointment letters from the newly merged entities, while others were notified about redundancies, one of the sources said, declining to be named because of the sensitivity of the matter.

Another source said that as many as 500 staff had been axed.

Qatar Petroleum did not respond immediately to an emailed request for comment.

(Reporting by Hadeel Al Sayegh and Oleg Vukmanovic; Editing by David Goodman) ((Hadeel.AlSayegh@thomsonreuters.com;))