Top managers of Arthur Andersen LLP threw their support behind Paul Volcker's long-shot rescue plan Thursday and the company warned of "inevitable" layoffs ahead, underscoring the shaky state of the once-mighty accounting giant.

Six days after Volcker made a new proposal to try to salvage the firm, Andersen's U.S. managing partner issued a strong public endorsement following a meeting between senior Andersen officials and the former Federal Reserve chairman.

"We are committed to building the audit firm of the future under the leadership and recommendations of Mr. Volcker," said Larry Gorrell, who replaced Houston-based Terry Hatchett as managing partner earlier this month.

Andersen's 1,700 U.S. partners discussed the Volcker plan in a wide-ranging teleconference before Volcker's meeting with firm executives. Several partners did not return phone calls seeking comment.

Volcker scheduled a news conference for Friday in New York.

The firm asked Volcker in February to head an oversight board with wide authority to revamp Andersen's business practices. His plan calls for him to take over the firm and head a seven-member governing board, for the auditing and consulting businesses to be separated and for other reforms to be made.

But even with Andersen managers and partners on board, the plan has failed to secure its most critical element — a government decision to scrap the obstruction-of-justice charge against Andersen for destroying tons of records of Enron Corp., its bankrupt audit client.

A company spokesman confirmed Thursday that Andersen plans layoffs due to a continuing hemorrhage of clients. Responding to persistent reports the total could reach 6,000, Patrick Dorton said no final decision had been reached.

"Given the decision by the Justice Department to indict the entire 28,000-person firm, it is inevitable that some reductions in work force will have to be made in the coming months," he said. "As a firm, we are considering a number of options that will provide continued high-quality service to our clients and career opportunities for our people."

Employees expect the pink slips any day now.

"Everyone is upset about it but is braced for it," said Katherine Dorn, a campus recruiter at Andersen's Chicago headquarters, home to 5,300 employees.

Andersen has now lost at least 97 public audit clients this year and gained just two new ones. Southern Co. was among the latest defectors, switching on Thursday to Deloitte Touche Tohmatsu.