TMP Worldwide , parent of online job giant Monster, will lay off 525 employees and consolidate 80 offices as companies continue to delay hiring until an economic turnaround is evident.
TMP currently has about 10,300 employees, a spokesman said.
“Although there are some promising signs of an economic recovery, the employment market has not improved,” said Jim Treacy, TMP’s president and
COO. “The continued weakness in our markets is requiring a renewed emphasis on streamlining our operations.”
Treacy said he does not expect companies to begin hiring for permanent positions until 2003.
The company will take a charge of $75 million, or 42 cents per diluted share after taxes, against its second-quarter earnings to cover severance packages and lease
buyouts. The moves are expected to save New York-based TMP $30 million in 2002 and $50 million in 2003.
The cuts were announced with first-quarter financial results. For the three month period, TMP tallied earnings (excluding items such as amortization) of 14 cents per
share, in line with analysts estimates, but lower than the 22 cents during the same period last year.
The company’s net earnings were 6 cents per share, down from 9 cents a year earlier. Sales slipped to $557 million from $692.1 million in the same period last year.
Commissions and fees fell to $290.8 million from $377.2 million a year earlier.
“We strongly believe that the full value of the strategic and profitability initiatives we implemented in 2001 and early 2002 will become clearly evident as the economy
rebounds,” said Andrew J. McKelvey, TMP’s chairman and CEO.
Many of the cuts will likely come from companies acquired by TMP during the last year.
Expanding its footprint, both geographically, and in different work sectors, TMP went on a buying binge. Most of the properties were integrated into Maynard, Mass.-based Monster, which still enjoys strong traffic. The company also said Monster Europe will break even this year.
As part of the reorganization, Monster will work to increase sales to existing large companies as well as go after small business who are not currently using Monster.
The company’s announcements were made after market’s closed. Earlier, shares of TMPW closed at 23.31, up 0.43, or 2 percent. In the last 52 weeks, the issue has ranged from 20.68 to 64.1.
