Michael Page continued to cut staff numbers during the first quarter of 2009 as the impact of the financial crisis continued to affect its business.

The number of staff employed by the company at the end of March was 4,134 compared with 4,943 at the end of 2008, a 16% reduction. Headcount at the end of March 2009 was 24% lower than a year ago.

UK headcount fell by 262 during the quarter from 1,640 at the end of 2008 to 1,378 at the end of March, a 16% reduction.

Steve Ingham, chief executive of Michael Page, told a conference call: “These are tough times. Clearly it is not enjoyable reducing headcount, but we are reacting to market conditions well and will continue to do so.”

However, Ingham said he was conscious of the balance between cutting costs and reducing the ability of  the company to take advantage of any economic upturn when it arrives.  He said it was important to have “the right level of fee earners for the right level of activity without cutting into the flesh of the business”. This would ensure that the company had the right number of offices and staff to grow in the long term.

Ingham said those areas of the business which had cut costs first, namely UK and US banking were closest to that point of balance.  Headcount in UK banking had seen a 50% reduction since its peak, he said.

Ingham said his key goal was to retain the company’s “outstanding people”. Most of those who had left the business were staff with less than two years’ experience.

However, he said that the company would continue to cut costs and headcount further should business activity levels continue to fall.

• Group Q1 gross profit of £95m (2008: £140.3m), a decrease of 32.3% (39.7%)
• EMEA gross profit (50% of group) of £47.7m (2008: £65.2m), a decrease of 26.8% (39.1%)
• UK gross profit (30% of group) of £28.9m (2008: £47.1m), a decrease of 38.7% 
• Asia-Pacific gross profit (10% of group) of £9.4m (2008: £16.4m), a decrease of 42.3% (49.1%)
• Americas gross profit (9% of group) of £9m (2008: £11.6m), a decrease of 22.6% (33.6%) lower by 39.3% (46.5%)
• Temporary gross profit (30% of group) lower by 7.0% (15.3%)
• Group headcount decreased by 809 (16%) in Q1 to 4,134

In a statement, Steve Ingham, says: “As anticipated, the group generated a higher gross profit in March than in either of the first two months of the quarter, resulting in a first quarter operating profit in the region of £3m.

“However, market conditions continued to weaken during the first quarter of 2009, with the impact of the financial crisis now evident in virtually every market and discipline in which we operate, albeit to varying degrees.”