Bearingpoint, one of the world's leading IT and management consultancies has filed for protective bankruptcy in the US.
The company employs 15,200 people in 60 countries and last year had had revenues of £2.3 billion.
Formed from KPMG Consulting in 2001, management say their work will continue as normal while the restructuring takes place.
"Our day-to-day operations will continue uninterrupted and we want to assure our employees and customers that we remain committed to serving our clients and to providing world-class consulting solutions," said Ed Harbach, CEO of BearingPoint. "This restructuring is an important step to secure a better and stronger future for BearingPoint," he added.
Veteran analyst Richard Holway said, "Bearingpoint have filled the rumour mill for some time (however), this is still quite a shock," he said.
"With new projects on hold, management consultants, who often have as bad a reputation as bankers, are an easy first target for cost cutting. But this must set the alarm bells ringing in many a marbled hall right now."