Revenue fell 16.1% in the third quarter to $78.1 million at Computer Task Group Inc. (NASD: CTG). The revenue decrease reflects recurring weakness at several of the Buffalo, NY-based IT staffing provider’s larger staffing clients, combined with lower than anticipated demand in its healthcare solutions business.

CTG reported a net loss of $16.2 million compared to net income of $2.1 million in last year’s third quarter. Results included a non-cash impairment charge of $15.8 million for the write-down of goodwill related to its healthcare business as well as $1.5 million in severance charges related to two former executives.

Quote

“As further evidence of the challenging environment faced by some of our clients, our largest staffing client informed us they would reduce a portion of the CTG-provided services beginning in the fourth quarter due to a consolidation of service providers,” said Bud Crumlish, president and CEO. “We expect the size of this reduction to be approximately 20% of historical revenue from this account on an annualized basis. Additionally, for a portion of the remaining business with this client we expect a slight reduction in profitability due to lower pricing. Importantly, we have taken further action to reduce costs to more than offset the impact of the loss of revenue and profit from this account.”

Revenue by segment and geography

Guidance

CTG expects fourth-quarter revenue to range between $73 million and $75 million, and full-year 2016 revenue to range between $320 million and $322 million.

Share price and market cap

Shares in CTG fell 5.36% in early afternoon trading to $4.41 and the firm had a market cap of $72.18 million, according to Yahoo.