Marsh & McLennan to Cut 3,000 Jobs

November 10, 2004, 1:00 a.m. EST 1 Min Read

With its revenue falling 94% in the third quarter, Marsh & McLennan announced Tuesday that it will lay off 3,000 people, or 5% of its workforce, including roughly 750 people at Putnam Investments and Mercer, its human resources consulting unit.

The firm announced third-quarter net income of $21 million, or 4 cents a share, down from $357 million, or 65 cents a share, a year earlier.

"This has been a difficult time for the company," Chief Executive Officer Michael Cherkasky said in a statement, referring to the bid-rigging and price-fixing probe at the firms insurance unit, which has wiped out 42% of the firms market value, not to mention the market-timing investigation at Putnam. "We recognize the seriousness of the problems we are facing and are moving quickly to correct them. Unfortunately, we must also adjust staff levels based on the realities of the marketplace and our current situation."

Marsh has set aside $232 million as the "minimum expected liability" for a settlement in the insurance probe and has already agreed to pay $40 million to settle with the SEC over market timing. All told, the firm expects to the staff cuts to result in $325 million of restructuring charges over the next six months but to then save $400 million a year.