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

Design and engineering firm Scott Wilson has begun a programme of job cuts that will reduce its worldwide headcount by 10% overall, saving 拢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 鈥渞apidly deteriorating global economic environment鈥.

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

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 鈥渞eflecting the benefits of its diversified business model鈥.

However, the firm said: 鈥淐ertain 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.鈥

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

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