Advertising giant Cordiant Communications has joined the growing band of firms to warn that a trade slump following the terror attacks on the US may prompt lay-offs.

Cordiant's share price halved in early trade after the firm warned that the atrocities have prompted clients to axe campaigns.

The cancellations come at at time when an industry downturn was already escalating into a global slump, said the firm, which operates in more than 80 countries.

"The downturn in marketing expenditure in North America has spread to Europe and Asia Pacific," Cordiant said, warning that takings will slide 5% this year.

"Trading conditions are currently the most difficult experienced in recent years."

Deeper cuts

While the firm had earlier earmarked �10m to pay for a redundancy programme this year, it warned it might have to cut deeper into its operational costs.

"Our cost saving programme is on track, although in the light of current circumstances we are in the process of re-evaluating our cost base targets," Friday's statement said.

However the firm said its broad spread of operations left it well positioned to benefit from a return to "normal market conditions".

The firm's shares fell by almost 50% to 47.5p in opening trade before recovering to stand at 56p, down 41%.

The shares in March last year topped 400p.

Cordiant Communications was formed in 1997 on the demerger of Saatchi & Saatchi from parent company Cordiant plc.