Consultant Mott MacDonald has embarked on a cost-cutting round that could lead to job losses at Franklin + Andrews, its QS and project management business.

In its 2004 annual report and accounts Mott MacDonald said that the management, economics and consultancy division, of which F+A comprises about 60%, had had “a very challenging year on a number of fronts”, and as a result there would be a focus on “controlling overheads”.

Guy Leonard, managing director of the division, said the job cuts could hit director and junior levels but claimed only a “handful” of staff would be affected.

Keith Howells, managing director of Mott MacDonald, said the company was looking to increase the proportion of fee earners to non-fee earners. He added that the scale of job losses would be “nothing significant” but said no decisions had yet been made.

Commenting on F+A he said: “Paradoxically, there is a lot of pressure on salaries but pressure on rates at the same time so you have got to deal with it from both sides.”

Pre-tax profit for the group fell almost 13% to £11.5m for the year to 31 December 2004. Turnover rose 3% to £485m. Profit and margins were down “partly due to contracting core markets and difficult trading conditions”, according to a statement within the results.

Howells said the main concern was the UK transport business, because of uncertainty in the highways and railways sectors, notably Crossrail. Mott MacDonald has a pensions deficit of £83m and is paying £5.4m a year to deal with that.