Troubled headhunter Whitehead Mann has been forced to close its US division, shift its stock market listing and slash managing director Chris Merry’s salary after warning its annual losses could reach £20m.

The company, which has issued three profit warnings in the past six months, will make substantial annual savings on rent over a period of 12 years by closing its US operations, Merry (pictured) told Recruiter.

Whitehead Mann also plans to move its stock market listing to the Alternative Investment Market, “a market that is considered by the directors to be more appropriate to a company the size of Whitehead Mann”, Merry explained. This alone will save the organisation £250,000 a year in exchange costs, and means it will be subject to less onerous reporting terms.

In addition, Whitehead Mann approached shareholders last week about a £13m share rights issue. This money will be used to fund the group’s restructuring strategy and strengthen its balance sheet. The money raised will also go towards a new share options scheme to boost staff retention.

“We want to align the interests of our employees and our shareholders,” said Merry. “It’s an extra incentive for people to stay.”

Whitehead Mann anticipates revenue for the year to 31 March 2005 will be approximately £4.5m below expectations. Losses before tax and after exceptional items are expected to be around £20m.

Rebuilding the firm’s reputation comes next, said Merry. “Building intellectual capital is at the top of our agenda. Our forward strategy is a huge reassurance to clients.”