NGS Group AB (NGS:STO), a Sweden-based staffing firm operating in the education sector and healthcare sectors, that it is starting a restructuring program with the aim of improving profitability.

The restructuring will affect all operations and functions both in terms of cost savings and a development towards a more functional organisation and aims to achieve higher operational efficiency.

According to the group, the cost savings will primarily focus on adapting the organisation and fixed costs to the current economy and market conditions.

During 2023, for example, the majority of Swedish regions have sharply reduced their purchase volumes in nursing staffing, which affected the entire industry. Furthermore, the market for recruitment and interim services has deteriorated due to a weaker economy.

The savings are expected to have an annual effect of approximately SEK 12 million (€1.0 million) starting in the fourth quarter of 2023. The cost of the savings program will be reported as a one-off cost and communicated in the third quarter of 2023. The company also said it will shortly begin negotiations with union parties.

Erika Rönnquist Hoh, CEO NGS Group, said, “Through this restructuring, we are creating the conditions for long-term profitability as well as a continued focus on our customers, employees and our entire broad range of services in our existing areas of operation in Sweden.”

“The investment already started in Norway is an important growth area that is not affected by the changeover, but continues according to plan,” Hoh said.

The board has also decided on a goodwill write-down of SEK 100 million (€8.4 million), which will be reported as a one-time cost in the third quarter of 2023. The write-down is due to higher market interest rates and an updated assessment of future income. The write-down does not affect cash flow and does not affect the underlying result.

In July, NGS Group reported revenue of SEK 130.6 million (€11.3 million) for the second quarter ending 30 June 2023, down 9.8% when compared to the same period a year ago.