Editors' Blog

The axe swings: half the top 50 will have cut by April

Posted 6/11/2008 by Alex Novarese

It seemed a simple enough exercise. After several months not short of redundancy announcements, and firms now reaching the halfway point in their financial year, we wanted to get a comprehensive picture of the intentions of the UK top 50 with regards to job cuts.

With 16 of this group already having announced jobs cuts at some level, resulting in the loss of more than 350 jobs, our main focus was on finding what the rest expected over the next six months.

Firms were asked to identify themselves in one of seven categories with regard to redundancies over the next six months. The categories were: a) already made redundancies, b) very likely, c) likely, d) possible, e) unlikely, f) very unlikely and g) no way.

Given the sensitivity of the information and in the interest of getting a reasonably accurate overall view, we agreed that we would not attribute the answers of individual firms. The only firms identified were those that refused to give any answer, which gave Linklaters the dubious distinction of being the only major City law firm to reach for the comfort of a ‘no comment’. This also required a lot of reassurance for some firms – one asked for us to confirm in writing that we would not identify their answer, before a partner gave us a single answer - b) very likely.

Given the current climate, I don’t know that you could say the results are shocking. Of the top 50, six more law firms are either actively preparing to cut jobs or expect to make cuts within the next six months. A further six said cuts in the current financial year were ‘possible’.

Seven firms refused to answer the question altogether. On balance, it seems highly likely that more than half of the top 50 will have made some level of job cuts before the end of the current financial year.

Glancing through the results, it also appears that larger City firms are somewhat less likely to cut jobs than smaller rivals – though cynics would view that as meaning they are simply less likely to admit it. This trend becomes more pronounced if you look at the wider UK legal market. Despite employing considerably more people, there have so far been more job cuts announced outside the top 50 than it in. Nevertheless, there remain a sizeable chunk of firms aiming, currently at least, to avoid job cuts with 14 firms responding that cuts were ‘unlikely’ and a further two plumping for ‘highly unlikely’. No one felt bullish enough to plump for the ‘no way’ option. Hardly shocking. Again, it’s that kind of market.

For another illustration of the changing times, readers can click on to the ever-popular Career Clinic where a debate is going about how to look busy when you’ve got nothing to do.

See Quarter of UK top 50 say they could cut jobs in H2 for more.