Troubled broker Marsh & McLennan (MMC) is laying off 3000 employees in the US in a cost-cutting move after investigations into the company by New York Attorney-General Eliot Spitzer.

The employees will be cut from the insurance brokerage unit, which is facing antitrust and fraud charges. The cut represents 5% of the company’s total workforce.

And the head-lopping is continuing at the highest levels of the company. Roger Egan, President and COO of Marsh’s risk and insurance services subsidiary, and global placement Chairman and CEO Christopher Treanor have been asked to step down – which is a nice way of saying they’ve been fired.

New Marsh & McLennan President and CEO Michael Cherkasky says the management decisions were difficult and not based on any suggestion of culpability.

“However, at the end of the day, Mr Egan and Mr Treanor were accountable for the areas of the business that have been the focus of investigations by the New York Attorney-General’s office, and therefore we thought it was appropriate to make these changes.”

William Rosoff has also stepped down as Senior Vice President and General Counsel of MMC.

Meanwhile, giant insurer St Paul Travelers has been subpoenaed by state prosecutors in New York, Connecticut and Minnesota in relation to the investigations into how insurance brokers sell their products.

Aon and Willis have also received several subpoenas from regulators and insurance commissioners in regard to bid-rigging.