Andersen to axe 7,000

The majority of cuts will be in the firm’s audit practice and administrative services. Andersen’s Chicago headquarters and its Atlanta, Los Angeles and New York operations are expected to take the heaviest hits, as well as the infamous Houston office.

Larry Gorrell, US managing partner, said in a statement: ‘Of all the issues we have confronted recently, none compare to actions we are now forced to take with our employees.’

Harvard Business School associate professor Ashish Nanda said the slimming-down would not help Andersen survive unless it could agree on a settlement and succeed in selling its tax and consulting businesses to improve its bleak cash situation.

If this was achieved, he said Andersen might be able to survive as a ‘small audit-only firm’.

More than 100 clients have deserted Andersen since it was indicted by the US Justice Department on obstruction of justice charges, in its role as auditor of collapsed energy giant Enron.

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