Marsh & McLennan to Lay Off 3000 Workers

Fallout from Bid-Rigging Investigation Forces Marsh & McLennan to Eliminate 3000 Jobs

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Marsh & McLennan Companies Inc. said on tuesday that would be forced to lay off 3000 employess as it is struggling to deal with fallout from the bid-rigging investigation initiated by New York Attorney General Eliot Spitzer.

This came a day after the company announced that Roger Egan, president and CEO of Marsh, and Christopher Treanor, Chairman and CEO of the firm's global placement business, were stepping down. According to Michael Cherlesky, president and CEO of Marsh & McLennan Cos., "... Mr. Egan and Mr. Treanor were accountable for the areas of the business that have been the focus of investigation... and therefore, we thought it was appropriate to make these changes."

In addition, William Rosoff, senior vice president and general counsel for Marsh & McLennan Cos., has also stepped down. It was widely reported that he had attempted to stonewall Spitzer's inquiries.

So far, the company's share value has fallen more than 40 percent since the announcement of the investigation. Third quarter results were announced November 9, 2004, and were 59 cents per share, compared to estimates of 67 cents per share. This does include any losses stemming from the current investigation as that was announced after the start of the fourth quarter.

The company has reiterated that it will still be collecting all commissions earned before October 1, 2004 for the reserve fund of $232 million it is going to set up to cover expected costs to settle with Spitzer.

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