It said the reshuffle, prompted by "an extremely negative" downstream business environment and a weak global economy, was aimed at lifting earnings before interest, taxes, depreciation and amortisation (EBITDA) by about $500-550 million by 2014.
"In the framework of the programme MOL also revised the organisational structures needed for the operation," MOL, one of central Europe's biggest energy companies, said.
"Based on it MOL initiates restructuring, mergers and changes in the organisation of work, and as a result it proposes a collective redundancy of 700 people," it added.
A spokesman said the cuts would affect 6-7 percent of MOL's workforce in Hungary.
MOL said permanently high oil and energy prices have increased the operating costs of refining significantly and regional export prospects were shrinking due to the over capacity of the European refining industry.
MOL has recently announced plans to invest $1.4 billion in the next three years in Hungary to increase refining efficiency, as well as for the exploration and production of oil and gas.
MOL shares finished trade 2.1 percent lower at 18,370 Hungarian forints on the Budapest Stock Exchange on Friday, underperforming the blue chip index, which fell 0.5 percent.