Design firm predicts profits will be broadly in line with expectations as it reveals staff cuts to save £20m

Design and engineering firm Scott Wilson has begun a programme of job cuts that will reduce its worldwide headcount by 10% overall, saving £20m.

The firm said that five smaller offices in the UK had already been closed and some office space in major hub cities was being consolidated, citing a “rapidly deteriorating global economic environment”.

The announcement came in an interim trading statement from the £180m-turnover company, which said that May's year-end profits would be “broadly in line with the previous financial year”.

Scott Wilson said that its UK rail business and other international operations, particularly in China, India and Eastern Europe, continued to see high levels of demand “reflecting the benefits of its diversified business model”.

However, the firm said: “Certain market sectors in the UK and the Middle East have seen the deferral of client commitments to pipeline projects and, in a few cases, the postponement or curtailment of existing work-in-progress.”

Scott Wilson said that the costs of reorganisation, together with provisions against work in progress and debtor balances, would set it back by between £4m and £6m this financial year.

The group's net debt at the end of February was £29.5m against committed banking facilities of £70m, repayable in April 2011.

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