Cuts at Monster Not Expected to Hamper Service

By Staff Report

Aug. 28, 2007

If things go as planned, industry experts say Monster Worldwide’s sweeping cutbacks, which resulted in a 15 percent reduction of full-time staffers, should not have an adverse effect on the products and services that draw HR professionals to the job board.

“It is unlikely that customers will feel a difference from the reduction in headcount,” says Ashish Thadhani, who tracks Monster as senior VP of research for Gilford Securities in New York.

The restructuring eliminates 800 of the company’s more than 5,500 full-time positions, but most of these are in HR, finance and general administration.

Monster’s transformation into a flatter, more centralized organization should enable workers to respond faster and more efficiently to the needs of customers, says Neal Bruce, vice president of alliances at Monster.

The product development division won’t be cut, and Bruce adds that an expansion of the worldwide sales force is likely as international business has become a key element in Monster’s growth. Some 35 percent of Monster’s revenue is derived from overseas markets.

Monster says the cutbacks will save $150 million to $170 million annually, with $80 million earmarked for new products and services geared toward improving recruiting efforts for HR professionals.

“Reinvesting back into the business is a smart move,” Thadhani says.

Industry experts don’t expect problems with Monster’s core job-postings business in the wake of the restructuring, since the functions are relatively simple and highly automated.

Yet there are concerns for clients who use complex functions like Web site hosting and database integration, which require far more management than job postings, says Ed Newman, founder and CEO of the Newman Group, a talent recruiting consultancy.

“There are certain operations that are very client-intensive because there is always something that needs to be ironed out or upgraded,” Newman says. “This is where Monster needs to be most vigilant against potential defection rates.”

—Gina Ruiz

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