Global recruitment giant TMP has announced that it will cut 525 jobs after it reported that the economic slowdown has continued to impact on its earnings.

Results for the first quarter of 2002 revealed that earnings from fees and commissions had dropped by nearly a quarter compared with the same period in the previous year.

Total commissions and fees dropped by 22.9% from $377.2m in the first quarter of 2001 to $290.8m in 2002.

President and chief operating officer Jim Treacy said the employment market had “not improved” and that TMP would continue with a cost-cutting initiative.

A total of 525 job losses in 80 offices across the world will cost the company $75m in the second quarter. The reorganisation will generate savings of $30m in 2002 and $50m in 2003.

“The continued weakness in our markets is requiring a renewed emphasis on streamlining our operations,” Treacy said.

Chairman and CEO Andrew J McKelvey was keen to talk up the prospects for TMP and claimed the reorganisation had already begun to benefit sales.

He said: “Despite the challenging conditions, we have already begun to see evidence of increased cross-selling as a result of our strategic reorganisation.”

Profit margins dropped from from 9.7% to 8.6%, with net income declining by more than a third from $24.8m to $15.6m.

TMP adjusted its earnings forecasts to 90 cents per share for the full year 2002, compared with $1.27 for 2001.

Treacy blamed the disappointing results on lower corporate spending on personnel services.