Perhaps Monster doesn’t think it’s quite hip enough — or at least as cool as other popular sites that promote social networking as the method du jour of connecting workers with companies.
That’s one way to look at its decision to invest close to $80 million to become more competitive in technology, marketing, and advertising.
However, one step on its road to hipper technology is cost savings. That’s why Monster Worldwide announced Monday it is cutting 15% percent, or approximately 800 employees. The company expects this plan to reduce its current operating expense base by $150 million to $170 million on an annualized basis.
This layoff also follows the announcement that its second-quarter income fell 27.8% to $28.6 million from $39.6 million for the same time period a year ago.
The cuts are immediate and will move into 2008 in order “to deliver the kind of experience to employers and job seekers that will maintain Monster’s status as the #1 brand in the online career marketplace,” chairman and CEO Sal Iannuzzi wrote to his workers on Monday.
In a letter to customers, Monster sales reps noted that this restructuring allows the company “to make reinvestments in some key opportunities, specifically new, innovative products while increasing our global, national, and local marketing presence.”
Based on an internal memo obtained by blogger Joel Cheesman, the company will hold a number of meetings to answer employees’ questions related to sales, telesales, and the company’s future overall.
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In a message to her team, Monster’s senior vice president of telesales Sue Hayden wrote, “Although this will be a tough day in many respects, I’m bullish on the outlook for Monster as a leader in this market and have a great deal of optimism about what these important changes will mean for our ability to be successful in the sales organization.”
These plans seem to poise the company for long-term growth, not a sale. At least for now, as Iannuzzi noted in his memo, “we will not allow short-term considerations to prevent us from investing in world-class, innovative products that will serve the next-generation of job seeker and employer needs.”
The staff reduction will primarily impact non-sales related functions in North America. Also, portions of the global sales force with low productivity rates will be affected. The company will also centralize certain non-revenue generating functions, such as human resources and finance, which had operated semi-autonomously within each business unit.
In separate Monster news last week, Monster founder and former CEO Andrew McKelvey was added to a revised shareholder lawsuit. The shareholders suing Monster Worldwide over its stock option investigation added McKelvey to the suit, claiming he engaged in a “practice of backdating option grants to ensure they were deeply ‘in-the-money’ when actually granted.”
McKelvey resigned in October but was never formally charged. Monster fired its former general counsel, Myron Olesnyckyj in September 2006. He later pleaded guilty to criminal charges.