Thursday, April 30, 2009

UK Redundancies

This just in from Charles at The Orange Rag.

"Legal Week in the UK reports that Allen & Overy (A&O) has come to the end of its redundancy programme, with around 450 staff set to leave the firm this week. 200 associates and 200 support staff in A&O’s offices worldwide will leave the firm, with a further 47 equity partners also losing their jobs. Half of the cuts are expected to hit the London office (around 100 fee earners and 100 support staff). Overall, London will shrink by 10% as a result of additional staff taking voluntary redundancy.

The restructuring is expected to cost A&O £44m once redundancy packages are paid out, with the firm previously stating that equity partners had been asked to contribute an average of £30,000 each of fresh capital, equating to around £11m, to help fund it. A&O’s restructuring was guided by a series of principles set out by senior partner David Morley, who told staff that A&O had considered alternatives such as reduced hours, reduced pay, sabbaticals, secondments and trainee deferrals, but concluded that none of the methods would deliver the appropriate level of cost savings required."

The positive here for firms considering similar moves is that (unlike many of their peers), A&O took this hit all in one go, rather than hiding under a phased approach that saw small numbers of staff going in numerous 'rounds' of redundancies - an approach which keeps morale low for longer.

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