TMP Worldwide (Nasdaq: TMPW), parent company of dominant online job search site Monster.com, said Tuesday it will cut jobs and lower financial goals in the wake of the September 11th terrorist attacks on the United States.
“Unfortunately, like so many others around the country, we saw business activity cease in the days immediately following the attacks,” TMP chief executive officer Andrew McKelvey said. “It is now clear to us that September 11 has left a large impact on the health of the economy.”
Monster will cut 125 jobs worldwide — approximately 10 percent of its workforce — including 60 at its Maynard, Massachusetts headquarters.
According to published reports, Monster told workers about the layoffs during the day Tuesday and told them to leave the building within half an hour.
The job site, which grew rapidly as TMP went on an acquisition spree earlier this year, will employ about 1,100 people worldwide after the cuts.
Economy, Attacks Blamed
The attacks will impact both third and fourth quarter earnings, New York City-based TMP said. Revenue for the year will now be from US$1.45 billion to $1.47 billion, as much as $100 million lower than expected.
Earnings for the year will still be between 16 and 20 percent higher than a year ago, but will fall short of the company’s earlier estimates.
“Going forward, we expect to see a continued slowdown in the employment sector, as the economic pressure is expected to persist in the short term,” McKelvey said.
While TMP said it remains “positioned for growth in 2002,” the company said it will probably fall short of analyst earnings estimates for next year as well. TMP estimated 2002 earnings at $1.55 to $1.65 per share, compared with the $1.81 predicted by analysts.
That outlook is “based on expectations that federal government spending and other monetary and fiscal stimuli will create an economic upturn in the second half of 2002.”
TMP said Monster and the rest of its job-board properties will be well-positioned to benefit from a recovery, since hiring is usually a leading indicator of better economic times.
“We must not lose sight of TMP’s long-term prospects, which have not been diminished by the economic condition resulting from these terrible events,” said TMP chief operating officer Jim Treacy.
TMP also has a healthy balance sheet, Treacy said, with $300 million in cash as of September 30th and access to up to $120 million more. The job cuts and other moves will save TMP $60 million a year, Treacy added.
The cuts come after Monster and TMP used the economic downturn as an impetus for a buying spree. TMP acquired Jobline International, FlipDog and made a $460 million bid for HotJobs, its leading competitor. That deal is being reviewed by U.S. regulators.
While many technology companies are blaming the terrorist attacks for adding to their woes, others say the damage is not as bad as expected.
For instance, Site59.com, which sells last-minute travel through Orbitz and other sites, and Priceline.com (Nasdaq: PCLN) said Tuesday that they have seen customers return to their sites faster than originally anticipated.