Westaff Inc. (NASD: WSTF) swung to a $1.9 million loss in its fiscal first quarter ended Jan. 26 compared with a profit of $404,000 in the first quarter of the previous year, according to a recent filing with the U.S. Securities and Exchange Commission.

The company reported the softening economy struck its bottom line and it closed a number of offices in 2007. Westaff also said it installed a new pay/bill system in the first quarter and extended holiday closures at a number of its customers had negative effects as well.

First-quarter revenue at Westaff fell 10.1% to $116.8 million from $129.9 million in the same period in the previous year. Gross margin slipped to 17.3% from 17.6%.

Westaff Inc. (NASD: WSTF)
For the first quarter ended Jan. 26, 2008, compared with the same period in the previous year.
Revenue: $116.8 million, -10.1%
Net loss: $1.9 million vs. net income of $404,000