More job losses struck the consultancy sector this week, with WSP and White Young Green cutting staff by 10%.
WSP chief executive Chris Cole said 500 job cuts will be made by the end of the second quarter, in addition to the 500 job losses announced just before Christmas.
White Young Green said that it had reduced its 3,000-strong workforce by 235, but City analysts said more cuts will be needed as the company attempts to cut debts of £68M. At WSP the two rounds of redundancies equate to around 10% of its 10,000-strong global workforce and will save £12M.
“There will be around 1,000 job losses by the end of the second quarter,” said Cole. “Around 75% of the job cuts will be split evenly between the UK and the Middle East with the remainder spread around other countries.”
WSP said margins had been squeezed in the property sector and in the Middle East. “Dubai is a difficult place to be in at the moment, but there is still work in neighbouring countries,” said Cole.
“We have around 850 staff in the Middle East. Around 350 will be going, leaving 500 in the Middle East with about 70% of those based in Dubai who we will be gradually trying to move to other areas.”
Analysts said that more cuts could be on the way at White Young Green. “The company has done the right thing, but it has still got to do a lot more on cost reduction, and by that I mean people,” said analyst Numis director Francesca Raleigh.
White Young Green has been involved in takeover talks since June. Its share price has dropped by more than 70% in the last year. Pressure on margins is also expected to hit consultants as demand slows down, said Raleigh. “All firms are saying they are not going to do work at silly prices, but you have got to keep people busy.”