Marsh & McLennan, the insurance broker at the center of a bid-rigging probe, is to lay off 3,000 employees, or 5 per cent of its work force, and reported third-quarter profit tumbled 94 per cent.
The job cuts are needed because of expected declines in revenue, the New York-based company said.
Three-quarters of the cuts will come from its Marsh risk and insurance services unit, and other cuts will affect its Putnam Investments mutual fund unit and its Mercer human resources consulting unit.
New York Attorney Mr General Eliot Spitzer has accused Marsh of rigging bids and colluding with American International Group and other insurers to fix prices.
Marsh set aside $232 million as the "minimum expected liability" for any civil settlement with Spitzer. Individual employees might still face criminal charges. It also said its Putnam Investments unit agreed in principle to pay $40 million to settle US Securities and Exchange Commission charges over its brokerage practices.
Marsh estimated it will take $325 million of restructuring charges over six months to cover the costs, but ultimately will save $400 million a year.
Marsh ousted two senior Marsh Inc. executives, including President Mr Roger Egan, linked to the practices being investigated by Mr Spitzer. Neither was accused of wrongdoing. Marsh's general counsel also stepped down.