Andersen UK to lay off 1,500 staff

Andersen's John Ormerod (left) announcing the Deloitte deal

In a piece of timing echoing recent rows over the government allegedly burying bad news, Andersen UK has announced 1,500 redundancies right in the middle of the Chancellor's Budget speech.

The firm said a decline in business in the wake of the firm's involvement in the Enron scandal meant jobs had to go. Last week the UK arm of Andersen announced it would merge with rival Deloitte Touche Tohmatsu.

The announcement came from human resources... if we had it our way, it would have been different

Andersen UK press officer

Andersen UK currently employs about 5,000 people, and consultations about who is to leave are to begin immediately, the firm said.

"The combination of difficult economic conditions and the effects of the Enron situation means the UK firm is not achieving the levels of business activity on which our headcount is based," said managing partner John Ormerod in a statement.

Losing business

Senior partners are thought to have met on Tuesday to discuss the response to reduced levels of business.

The firm has suffered from the pullout of hundreds of high-profile companies keen to avoid any taint of the Enron scandal.

Andersen's US arm is facing a federal prosecution for obstructing justice by shredding documents related to Enron's alleged false accounting.

That means that much of the work auditing overseas subsidiaries which formerly found its way to Andersen in other countries has now evaporated.

Bad timing

An Andersen press officer defended the timing of the message, saying that the cuts were announced to staff on Wednesday via a webcast and the press announcement had to be made immediately afterwards.

But the final decision on timing was down to the human resources team, not the press office.

"If we had it our way, it would have been different," the press officer told BBC News Online.

Unions were incensed by the timing, with Roger Lyons, general secretary of Amicus, calling it "an absolute disgrace".

The affair smacks of the UK government's recent tribulations, in which a special adviser to the Transport Secretary, Stephen Byers, suggested the afternoon of 11 September, shortly after hijackers deliberately crashed two aeroplanes into the World Trade Center in New York, would be a good day to bury news.