Chime, owner of the HHCL & Parners ad agency and Bell Pottinger Communications, has made 80 redundancies since the beginning of the year.
The cuts came across the board and will lead to a 拢3m hit in exceptional costs for the six-month period. These are calculated to result in cost savings of some 拢4m on an annual basis. Last year, Chime's slashed its headcount by 15%, as it sought to reduce costs.
Shares in the group were trading at 108.5p this morning, down by 21.5p, after it released the statement describing the market place as "very weak". It said that management expects revenue for the first six months of the year to fall by 10% compared with the second half of 2001.
The public relations side of the business continues to suffer from the lack of mergers and acquisitions work, and the hi-tech downturn continues to impact on Chime Online. The only bright spot is in marketing services, which the group says is performing ahead of expectations.
Chime also reiterated its intention to expand HHCL, after its annus horribilis in 2001, which saw the ad agency lose a raft of clients including Tango, Egg and Amazon. The group said it was now in negotiations to make the agency's offer available on a wider international basis.
Lord Bell, chairman of Chime, warned in March: "This year will be very testing and the first half, unlike previous years, will be a lower proportion of our total achievement."
Today's statement confirmed that the second half should be stronger, but that recovery may be slower than anticipated. "We are not at this stage anticipating any exceptional costs in the second half of 2002, unless a further decline in market conditions makes it necessary," the company said.
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