Monster Profit Falls, To Cut Staff by 15% as Part of Restructuring Plan
Monster Worldwide, parent of jobs Web site Monster.com, reported lower-than-expected quarterly earnings on Monday and announced a restructuring plan that includes cutting 800 jobs, or 15% of its full-time staff.
Monster shares rose 1.5 percent on the restructuring plan, which the company said would save up to $170 million a year, with much of the savings dedicated to improving technology, international expansion, and a corporate streamlining.
"We're taking $160 million or $170 million in costs, but we're reinvesting at least half of that back into the company," Chief Executive Sal Iannuzzi told Reuters.
Iannuzzi, who took over in April, said he was focused more on expanding the company than setting it up for sale.
The company said net income was $28.6 million, or 21 cents per share, compared with $39.6 million, or 30 cents per share, a year earlier.
Excluding discontinued operations and a charge of 10 cents per share for severance for former executives and stock options investigations, earnings were 32 cents per share.
On that basis, analysts on average were expecting 34 cents per share, according to Reuters Estimates.
Sales rose 20 percent to $331 million, below forecasts of $337 million.
Monster said it would immediately begin cutting 800 jobs, mostly in North America and outside its sales functions. It will also take steps to centralize functions like finance and human resources, and said it aimed to cut operating expenses by $150 million to $170 million per year.
Monster will take a pretax charge of $55 million to $70 million beginning in the third quarter.
The company said it expected full-year revenue of $1.34 billion to $1.37 billion, compared with current estimates of $1.37 billion.
Monster shares were up 58 cents at $38.48 in morning trading on the Nasdaq.