Law firm Allen & Overy is expected to cut 450 jobs this year in a £44m restructure in response to the global recession.
The company told staff yesterday that it would reduce headcount by 9% by the end of this financial year. The cuts will affect up to 47 partners, 200 junior fee-earning lawyers and 250 support staff. About half of the losses are expected to be in London, according to newspaper reports.
The restructure also involves a reduced share of equity among 35 firm partners. Remaining partners will be asked to inject an average of £30,000 to raise the firm’s working capital by £11m.
Junior lawyers and support staff will have their salaries frozen until at least the end of 2009 and hourly fees charged to clients will be capped indefinitely.
Research from Personnel Today’s sister organisation, pay specialist IRS, published today, found one-quarter of pay awards decided this year had resulted in pay freezes across the private and public sector.
Meanwhile, administrators have decided to cut 438 staff at JJB Sports loss-making LifeStyle division following the closure of 45 shops. KPMG said the remaining stores would continue to trade while a buyer was sought.