By: Jennifer Saba
Monster Worldwide announced today it plans to cut 15% of its workforce or 800 positions due to slowing growth especially in its North America division. The reduction will take place throughout the year and mostly will impact non-sales related functions in North America.
The online recruitment site said that total revenue during 2Q grew 20% to $331 million compared to the same period a year ago. Monster Careers’ division reported that revenue increased 23% to $291 million mainly on the strength of gains made at its global division, which was up 57% to $117 million for the quarter. North America Careers’ revenue rose 7% to $174 million.
Sal Iannuzzi, chairman and CEO of Monster Worldwide, said in a statement, “We continued to experience strong performance in our International business, reflecting our efforts to expand market share and brand awareness in key markets in Europe and Asia. However, we are not satisfied with our overall performance.”
In addition to slashing positions, the company said it will consolidate some back office functions like human resources and finance. The company expects to save $150 to $170 million on an annualized basis.
The company also said it plans to invest approximately $80 million in technology, marketing and advertising.
“The restructuring plan recognizes that we can — and will — do better in driving long-term performance for our shareholders,” said Iannuzzi. “We will not allow short-term considerations to prevent us from investing in world-class, innovative products that will serve the next-generation of job seeker and employer needs.
In a note to investors, Goldman Sachs pointed out that the North America revenue results for the quarter was the “weakest performance since the last recession.”
“Monster’s slowing domestic growth is consistent with what we’ve seen from the print help-wanted ad market in recent periods,” wrote analysts. “A key uncertainty weighing on the stock is how much of the slow-down is a function of cyclical factors versus the impact of a more intense competitive environment.”