Second-quarter revenue fell 5.6% at Computer Task Group Inc. (NASD: CTG). The Buffalo, N.Y.-based firm reported IT solutions revenue fell 21.2% while IT staffing revenue rose 5.0%.

Gross margin also narrowed and net income fell.

Unfavorable foreign currency exchange rates reduced revenue by $3.9 million, according to the company.

CTG also announced a $1.1 million charge for the noncash write-off of its IT medical management software and a $1.2 million charge for a workforce reduction in Europe.

The company also reported it aims to accelerate growth in its IT staffing business and will beef up the number of IT recruiters in the US by more than 35% by the end of the year.

CTG hired Al Hamilton as VP and general manager of Health Solutions and Life Sciences. Hamilton has begun an in-depth review of the business.

The company also put its headquarters building in Buffalo on the market for $3.95 million.

Quote

“While I have made many difficult decisions over the past three months, I firmly believe they were steps that had to be taken to position CTG for a return to improved profitability,” said CEO Cliff Bleustein. “I believe our management team is even stronger than when I came on board and our balance sheet is more flexible. Our staffing business and Europe, in local currencies, are growing while our energy business remains profitable. Our healthcare business is growing within technology and advisory consulting as delivery and application support stabilize. As we ramp up our sales force, we expect to see a return to solutions growth in 2016. I will continue to evaluate the business and make changes as necessary to provide flexibility and improve performance.”

Revenue by segment and geography

Guidance

CTG expects third-quarter revenue to be down 2% at the midpoint of guidance.

Share price and market cap

Shares in CTG rose 2.55% in early afternoon trading to $6.84. The firm had a market cap of $128.02 million, according to Yahoo!