Broker reviews Norwich operation after scathing criticism of performance by group chief
Marsh could cut jobs following a planned restructure at its Norwich office.
The broker has drafted in two business process outsourcing firms to advise on the restructure.
Like other major brokers, it is looking for ways to maximise profitability in the soft market.
Capita and Xchanging have been reviewing Marsh’s Norwich office since last Wednesday, and are due to present an action plan by the end of the year.
In a memo, Marsh told staff that the company would “consider all options open to us at this time”, but reassured them that “nothing has been decided yet”.
The news follows scathing criticism of Marsh’s third quarter performance by Michael Cherkasky, president and chief executive of parent company MMC, and the departure of two senior executives and 10 other staff in the US.
The memo read: “Marsh UK is undergoing a transformation to achieve its growth ambitions, including boosting revenues to $1bn and margins to 20% by 2010.
“It is critical that we ensure we have the best and most efficient operational structures and processes in place.
“[Capita and Xchanging will] observe what we do, review our performance against both other companies and best practice and then provide recommendations on what we should do to operate more effectively.”
According to the memo, the FSA, Marsh’s UK Board and senior Marsh executives will all be consulted on the recommendations.
A source at a major UK consultancy firm said: “This is probably part of an overall costing exercise. I expect there to be headcount reductions sooner rather than later.”
A spokesperson for Marsh said that job cuts in the US were unconnected to the Norwich restructuring.
In New York, Marsh’s ex-chief executive Brian Storms and ex-chief marketing officer Nancy Elder left the company after it missed analysts’ earnings estimates in two consecutive quarters.
Elder had been in charge of a $17m advertising campaign – the largest in the history of the company.
In a drive to reduce escalating expenses, 10 of the US marketing and communications teams were also cut.
In an internal memo circulated before the release of the Q3 update, Cherkasky said Marsh was looking to restructure its marketing team “back to 2005 levels”.