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After demand for temporary workers has been stagnating across Europe, Randstad (RAND:AEX) announced this morning that it will adjust its organisational structure in both the Netherlands and Germany as a result of which the company is expecting to incur non-recurring costs up to €20 million in the coming months.
A spokesperson from the company’s Investor Relations team confirmed to Staffing Industry Analysts that the firm will cut headcount in the two countries but declined to comment how many workers will be affected. But he said the firm was looking to reorganise across several areas, including management teams and those placed in head offices. More information will be made public on 26 July, he said, when Randstad is publishing its Q2 results.
The Dutch staffing firm first said in April this year that it will invest in activities “where growth continues… and adjust the organization where necessary.” Today Randstad announced that these adaptations are “required to retain decisiveness and create more efficiency in servicing our clients.”
Relating to the costs of up to € 20 million, the Group intends to realise “the related savings within one year after the adjustments have been made.”
This comes after the firm saw next to no growth in its European markets during the first quarter of the year although the business performed strongly in North America. Total group revenue in the quarter increased by +12% to €4,152 million, bolstered by the acquisition of SFN Group in September last year.
But in the Netherlands revenue dropped while Germany was the only country in Europe to see increased sales in the first quarter although margin pressure in the staffing and inhouse business had become more pronounced in the period.
In early trading this morning, the company’s share price improved by +2.8% to €22.85, down -28.3% from a year ago and +6.6% above the 52-week low of € 19.59 set on 13 September 2011. The staffing firm has a market capitalisation of €3.82 billion.