The Adecco Group reported softness in European markets and slowing growth in North America in its fourth-quarter earnings announcement today. Global revenue at the Switzerland-based staffing giant fell 4% in Q4 on an organic basis, which excludes the impact of currencies, acquisitions and divestitures. A slowdown in general staffing impacted Its North America revenue.

CEO Alain Dehaze said Adecco didn’t compromise on long-term investments despite the slowing growth. And the company noted gross margin improved year over year in the quarter.

“The group concluded 2019 with strong performance against a backdrop of ongoing economic uncertainty and market slowdown,” Dehaze said in a statement.

Adecco also posted net income in the fourth quarter, compared with a loss in the same quarter a year ago. The 2018 fourth quarter included a €270 million charge for impairment of goodwill.

Among its global operations, revenue was down across much of Europe and in North America. In Japan, however, revenue rose 7% on an organic basis, and the company noted growth in its “rest of world” region as well.

In North America, a slowdown in general staffing, where seasonal demand fell from the prior year, drove a deceleration in growth. The company said clients had restocked inventory earlier in anticipation of trade tariff increases, which was compounded by lower demand at a few key clients in the manufacturing sector. North American general staffing revenue was down 7% in Q4 on an organic basis.

Fourth-quarter revenue also fell 4% organically in its North American professional staffing business. Growth in “engineering and technical” and “medical and science” was offset by declines IT, finance and legal. North American professional perm placement revenue fell 6% organically year over year.

Revenue by geography

Adecco reported strong performances in its General Assembly training business and at Lee Hecht Harrison helped boost growth in its “career transition and talent development” segment. Revenue rose by 6% organically at Lee Hecht Harrison in the fourth quarter, and General Assembly revenue rose 27% organically.

The company cited a challenging market in Germany and Austria that was fueled by weakness in the automotive and manufacturing sectors. Brexit uncertainty still affected its UK and Ireland general staffing business.

Looking at revenue by type of business, revenue fell 6% in constant currency in industrial staffing, the company’s largest single business line.

Revenue by business line

For the full year, revenue was down 3% on an organic basis.

Full-year results

Guidance

January revenue was down 5% year over year on an organic basis with adjustment for trading days. The further slowdown reflects continued global economic uncertainty as well as strikes in France and the impact of the IR35 regulatory changes the UK, according to Adecco.

Management also said it’s tracking the potential impact of the coronavirus outbreak.

Share price and market cap

Shares in Adecco closed up 2.08% today in Europe to 54.98 Swiss francs (US$56.23); the company had a market cap of 8.80 billion Swiss francs (US$9.00 billion).