Kforce Inc. (NASDAQ: KFRC), a technology and finance/accounting staffing provider, reported second-quarter revenue fell 10.8% year over year to $389.2 million as clients showed “heightened caution,” according to the company.

“Our results for the second quarter reflect the continuation of an uncertain economic environment and, we believe, the actions being broadly taken across industries by our market-leading clients to ensure they are prepared for the possibility of a slowdown,” President and CEO Joseph Liberatore said in a conference call.

Temporary staffing, or flex, revenue fell 9.8% while direct-hire revenue fell 36.3% at the Tampa, Florida-based firm.

By business line, Kforce reported year-over-year declines in technology and finance/accounting, with tech revenue down 8.5% and finance/accounting revenue down 28.4%.

The company said it anticipated clients would reprioritize tech investments once economic conditions improve.

“While clients are acting with heightened caution today, we believe this is resulting in a tremendous backlog of desirable investments that will be prioritized once the macro uncertainties begin to clear,” Liberatore said. “Technology investments are simply not optional in today’s competitive and disruptive business climate.”

While clients continue to selectively trim resources on existing projects, Kforce has not seen clients terminate existing large projects, Kye Mitchell, executive VP and chief operations officer, said in the conference call.

Kforce projected third-quarter earnings of $0.60 to $0.68 per share, including a charge of $5.5 million, or $0.22 per share due to cost-cutting actions taken to address “lower levels of revenue that we are experiencing without compromising investment in key strategic initiatives.”  These actions will lower annual operating costs from current run rates by $3.5 million per quarter. There were posts on LinkedIn by workers reporting they had been laid off.

“While actions that affect our Kforce team are tremendously difficult to make and are never taken lightly, the impact of the macroeconomic uncertainties on our business drove us to take these actions, Liberatore said.

Guidance

Kforce forecast third-quarter revenue of between $359 million and $367 million, a year-over-year decrease of between 16.1% and 18.0%.

Chairman update

Board Chairman David Dunkel, who handed over the CEO reins to Liberatore in December 2021, had remained on staff to provide advice and counsel to the company through a multi-year agreement. However, on Monday Kforce reported the agreement was accelerated and Dunkel’s last full day of employment as a part-time employee was Monday. Dunkel still continues in his role as board chairman.