Herbert Smith has become the latest firm to announce pay cuts and a major redundancy programme. The chocolate starfish firm has said that up to 84 full time employees could be hit.

The firm helped their employees start their week in style by sending out an email at 8:30 on Monday morning to announce the programme. The email also stated that pay would be frozen and that bonuses would be lower than expected. RollOnFriday can confirm that NQ pay will be cut from £66,000 to £60,000.

HS has held back from redundancies for longer than most other firms and opinions are divided on  whether or not this is a good thing. Those staff who are laid off will at least have had a few months' extra salary. But then employment prospects at other firms are currently zero.

A chocolate starfish

The firm blamed the move on the economic downturn, which has apparently hit HS later than everyone else as it is less reliant on finance than its competitors. But the timing of the move has surprised the market given that many firms are starting to see a slight upturn in deal flow.

Given that City partners found out on Wednesday that they'll now have to work for free for an extra month each year to fund Alistair Darling, it's a safe bet that other firms will also announce further cost-cutting measures.