TNS cuts American workforce by 10 per cent as part of cost-saving plan

Taylor Nelson Sofres, the market research group, has cut its American workforce by 10 per cent as it restructures its business in the US to cope with the loss of customers and increased competition from internet-based rivals.

The axing of 100 employees will deliver £6m of the £10m cost-savings programme the company promised when it delivered a profits warning in July. There will also be job losses from its business in continental Europe, which is subject to a review, but those have so far not been quantified. TNS wants to chop £10m out of costs in its operations outside the US.

TNS reported an 11 per cent drop in pre-tax profits to £30m for the first half of the year yesterday. The company, which provides tailored data analysis for clients, also announced a £100m share buy-back.

It was that "custom" research business which led to the July profits warning. It carries out bespoke data collection for clients in such areas as customer satisfaction or reaction to a new product. The rise of data collection via the internet, however, has meant costs have fallen and new players have rushed into the sector.

The chief executive, David Lowden, said: "We have taken action where required and we are accelerating the implementation of our strategy right across the group. The 12 per cent increase in the interim dividend reflects the board's confidence."

The company is focusing on the higher-value end of the market, on data analysis rather than simple collection of information. Mr Lowden said there were still "growth opportunities very much in the value-added space" in the US.

However, analysts at Numis Securities said: "There is a lingering concern that the online problems which affected the US business could occur in other countries."