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US-based executive search firm Heidrick & Struggles International (HSII:NSQ) reported on Wednesday that net revenue in Europe dropped by -43% in the third quarter of the year to US$21.5 million year-on-year. In constant currency, European revenue fell by -38%.
In the three months to September, operating income in Europe was down by a sharp -79% to US$0.5 million from US$2.4 million a year ago. The number of consultants in the region was also cut by 28%.
“The improvements we've made to our cost structure have resulted in an increase in our year-to-date operating margin despite the revenue challenges we continue to face in the macroeconomic environment,” said L. Kevin Kelly, Chief Executive Officer.
“Clients are still safeguarding their resources related to expansion and growth until the environment becomes more stable, affecting the pace of new hiring decisions.”
Overall, net revenue declined by -18% to US$117.3 million from US$142.2 million in 2011. On a constant currency basis the fall was -15%. In Asia Pacific, revenue was down by -15% (approximately 12% on a constant currency basis) while in the Americas sales decreased by -6%.
The firm saw lower demand across several sectors, but the group’s operating income improved to US$10.2 million against an operating loss of US$12.6 million a year ago.
Heidrick & Struggles is expecting fourth-quarter net revenue to range between US$105 million and US$115 million.
The firm recently ranked 71st in Staffing Industry Analysts’ ranking of top global staffing firms.