Marsh & McLennan, the world's largest insurance broker, is about to announce thousands more redundancies from its global operations as part of a radical cost-cutting programme, after US regulators forced it to stop charging clients a lucrative form of commission.
Marsh may announce the massive redundancy programme as soon as next week. The number of employees to lose their jobs could be 7,000 globally, with some sources saying the number may be even higher. Marsh has 40,000 employees across the world, including 6,000 in the UK.
The move comes after Marsh agreed to pay $850m (£449m) on 31 January to settle charges brought by New York's attorney general, Eliot Spitzer, that it illegally rigged insurance bids.
Mr Spitzer also criticised fees known as "contingent commissions", paid by insurers to brokers to encourage them to direct clients' business their way. Critics say this practice, especially when not fully disclosed, hurts customers because brokers could give business to the insurers paying the highest commissions rather than to those offering the best deals.
Marsh reacted to Mr Spitzer's lawsuit by pledging to scrap contingent commissions, which will reduce profits from this year onwards.
The New York-based insurance broker also has to pay the $850m settlement over four years and could have to finance further settlements with government lawyers from other states who have made claims similar to those of Mr Spitzer.
As a result of the financial strain, Marsh said in November it would reduce its headcount by 3,000. The imminent announcement about job cuts will be on top of those redundancies.
Separately, Marsh has delayed unveiling the details of a new contingent commission-free business model because executives in London and New York cannot agree on the details.
Marsh's leadership in New York under its chief executive, Michael Cherkasky, wants to formulate a business model that will be ironclad against any potential conflict of interest between its own desire to boost profits and the need to find the best deal for clients.
However, senior figures at Marsh do not want to unduly dent the business in London, which is a major generator of profits and revenue and has not been involved in the allegations of illegal activity levelled by Mr Spitzer.
The London business is regulated by the Financial Services Authority, which has said that it is not against contingent commissions as long as they are properly disclosed to clients.
Marsh said it would not comment on its new business model, or on any future job cuts.Reuse content