Monster Worldwide disappointed investors Monday with a lackluster second-quarter earning report. The jobs giant reduced its revenue estimates for the rest of the year and announced a restructuring program that will force about 800 employees to spruce up their own resumes and hit the online job boards.
While second-quarter sales improved to $331 million from $275 million in the year-ago quarter, the parent company of Monster.com said profits slumped 28 percent to $28.6 million from $39.6 million in the same period last year.
Company officials said total revenue for the year will check in between $1.34 billion and $1.37 billion, down from an April forecast of between $1.36 billion and $1.4 billion. As a result of cutting about 15 percent of its workforce in order to slash annual operating expenses by $150 million to $170 million, Monster Worldwide will absorb a pre-tax charge of between $55 million and $70 million.
“While I regret that workforce reduction is a necessary part of our plan, we believe this action is in the best interest of our customers and shareholders,” CEO Sal Iannuzzi said in a statement.
Mounting legal fees related to the backdating of stock options as well as employee severance packages have taken their toll. In the second quarter alone, operating expenses surged 34 percent to $288.7 million from $215.9 million last year. In December, the company announced it would take a $339.7 million charge to pay for stock-option grants that former employees “intentionally” recorded incorrectly between 1997 and March 2003.
The restructuring plan also includes plans to spend an additional $80 million on advertising, promotions and new product development.
Monster Worldwide shares closed up $2.26 a share, or 6 percent, at $40.16 in Monday trading.
