Healthcare Reform Blamed for Division’s Demise

Has healthcare reform claimed its first victim? Yes, according to one firm.

Green Planet Group Inc. announced in a press release this week that it was getting out of the staffing business, in part, because of concerns over healthcare reform. That meant shutting down Lumea, its staffing division.

“The impact of the healthcare for America, Obamacare, on the temporary staffing industry is unknown, but its impact on the industry’s future will be significant,” the Scottsdale, Ariz.-based company reported. It believes only major staffing companies with substantial resources will have the best opportunity to grow in the future.

Lumea’s customers have been assigned to two other staffing firms — Corporate Resource Services (which ranks on the list of largest U.S. staffing firms) and a local Arizona firm.  

However, the problem wasn’t just healthcare reform. Lumea may have posted revenue of $35.9 million in 2011, but it had a host of issues that have little to do with the reform. The company also said its move to get out of staffing came because revenue growth at Lumea was minimal during the last 12 months. Further, Green Planet’s aim of combining a staffing business with a “green” technology business did not materialize. And to complicate matters, Lumea, a provider of semi-skilled and unskilled labor — had been in Chapter 11 bankruptcy proceedings as well.

It goes back to why Green Planet got into the staffing business in the first place. It acquired the assets of Easy Staffing Solutions in 2009 because it was trying to sell its green technology to existing Easy Staffing customers — such as Waste Management and numerous municipalities. However, things didn’t go as planned. The Lumea management team was fired in 2010 over unpaid payroll taxes and other allegations, according to court records.

The Lumea demise notwithstanding, it’s business as usual for Green Planet. The Lumea bankruptcy proceedings were voluntarily dismissed as the company moved to restructure and get out of the staffing business. “This reorganization will permit Green Planet to focus on its core green technologies, especially on its fuel efficiency and emission reducing technologies,” Green Planet President and CEO Edmond Lonergan said in a statement.

Green Planet is not the only staffing firm to raise concerns over healthcare reform, but it appears to be the first firm to state it was getting out of the market because of it. Just an excuse for a business decline or a legitimate point?


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Johnny Cocktails 04/10/2012 10:32 am

Thanks for the totally misleading headline.

JLNewmark 03/10/2012 4:23 pm

Pure excuse. It's not as if Obamacare -- not yet implemented, impacts unknown -- was the only thing standing between them and soaring success.

Artech Information Systems LLC

Antonio Carrion 03/10/2012 3:01 pm

There's some confusion here: How can a company state that it is dropping a staffing LOB because of concerns over healthcare reform and then admit that the impact of healthcare on the staffing industry is unknown? It seems more logical that the company found that staffing services and green technology business do not necessarily complement or supplement each other.

Also, if they think only major staffing companies with substantial resources will prosper (under healthcare reform), they should reconsider their green tech biz, when this industry truly comprises some major global players.

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