Andersen to sack 1,500 UK workers

Accountancy giant Andersen today sacked 1,500 workers in Britain in the wake of the Enron scandal.

Staff and unions are furious that the crisis-hit company chose to break the news via a webcast - followed by a press release - in the middle of Chancellor Gordon Brown's Budget speech yesterday.

Staff arrived for work at Andersen this morning with glum faces and refusing to talk. Security men kept a sharp eye on staff in order to keep them from the media.

The firm's head office in London will bear the brunt of the redundancies, but the rest of the company's UK network will also be affected, although which employees will lose their jobs has not yet been announced. Among Andersen's senior staff, up to 70 partners out of 400 are also expected to go.

Roger Lyons, general secretary of trade union Amicus, described the timing of the announcement as "an absolute disgrace". But the firm denied it had tried to "bury" bad news. A spokesman said: "I don't think our personnel department took into account external events."

With Andersen's US arm facing federal prosecution for obstructing justice in the Enron affair, hundreds of clients worldwide have severed links with the firm.

John Ormerod, Andersen's managing partner in the UK, said: "We deeply regret this decision and our aim is to carry out the process as fairly as possible to minimise uncertainty for employees."

The cut of nearly 30 per cent in staffing levels is in addition to 200 lay-offs announced last week, as Andersen UK prepares to combine its operations with rival firm Deloitte & Touche UK.

Andersen's links to the collapsed Enron badly damaged it. Arthur Andersen, the group's US arm, has been charged with obstructing justice for allegedly shredding documents while Enron was under investigation. In the UK, Stagecoach - the bus and train operator - dropped Andersen as its auditor, as did engineering group Mayflower and fund manager Amvescap.

Since the company announced a tie-up with Deloitte & Touche, job losses were inevitable. Andersen's international branches have been splitting off to merge with rivals. By turning to Deloitte & Touche, Andersen is one of several affiliates to go its own way with a different partner. The French section of Andersen Worldwide plans to merge with Ernst & Young France. Andersen's Spanish affiliate announced it was linking with Deloitte & Touche Tohmatsu.

Andersen's partner groups in Hong Kong and China plan to combine with PricewaterhouseCoopers, while units in Russia, Australia and New Zealand are working on arranging a merger with Ernst & Young.