)
EMBATTLED law firm Slater & Gordon (ASX: SGH) will cut around seven per cent of its workforce as it aims to reduce costs and make structural changes in the face of heavy losses and legal dramas.
The firm released a preliminary strategic and operational review and announced it has begun consulting with "impacted" employees as it attempts the monumental task of turning around a $546.8 million loss for FY17.
It's believed the job cuts could affect up to 175 employees and Slater & Gordon also indicated some offices could also be closed.
"A number of office locations nationally are impacted, but the majority of our existing national office network will be maintained," the company says in an ASX statement.
"The company believes that the implementation of a business-wide transformational plan including cost reductions and structural changes is necessary for the future of the Australian operations."
Slater & Gordon's board recently approved a debt-for-equity deal which effectively gave control of the company to a consortium of hedge funds led by Anchorage Capital Partners.
The deal will be put to shareholders in November and if approved will likely result in a board cleanout and wipe out the holdings of existing shareholders.
The company's billion dollar fall from grace was caused by its disastrous $1.3 billion acquisition of British professional services firm Quindell in 2015 which led to two class actions by aggrieved shareholders. One of those class actions was settled in July for $36.5 million.
Slater & Gordon meanwhile filed its own lawsuit against UK-based Watchstone Group over the sale of Quindell, alleging the company and its senior managers made "fraudulent misrepresentations" over the deal.
Since the purchase of Quindell, and the subsequent legal troubles and heavy losses, shares in the company which traded at just over $8.00 two years ago are now at just $0.07.
Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
Business News Australia
Get our daily business news
Sign up to our free email news updates.
Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support
)
)
)
)
)
