By Robert van den Oever
AMSTERDAM--Randstad Holding NV (RAND.AE), the world's
third-largest staffing company by sales, said Friday it will cut
jobs as it restructures its operations in the Netherlands and
Germany due to poor market conditions.
Netherlands-based Randstad said it will take up to 20 million
euro ($24.9 million) in non-recurring costs for the restructuring
in the second quarter. It didn't specify the savings target, but
said it wants to realize them within one year after the
restructuring measures begin.
Randstad said it seeks to adapt to market developments,
characterized by sales volume decline and price pressure.
In the Netherlands, the economy remains sluggish. Dutch staffing
market data show a decline in both volume and pricing on an annual
basis since the beginning of 2012, though Randstad gained market
share in the first quarter.
In Germany, the economy is in much better shape, but Randstad's
sales volumes declined in the first quarter, Jan-Pieter van Winsen,
the company's investor relations manager said. Only through the
positive price effects from changes in the German collective labor
agreement made in 2011, revenue went up in the first quarter. But
margins declined in the quarter and margin pressure has become more
pronounced over the last few months, Randstad said in its
first-quarter report.
Van Winsen pointed out that currently no similar restructuring
measures are planned for other countries.
Randstad had already mentioned the possibility of a
restructuring program when it delivered it first-quarter results in
late April.
Rabobank analysts said the restructuring exercise makes sense,
but it is "not a sign of strength."
The analysts would have welcomed further cost reduction steps in
countries like Spain, France and the U.K. In these markets,
pressure on both revenue and margins in the first quarter was even
higher than in the Netherlands and Germany.
Randstad's main competitor, Swiss Adecco (ADEN.VX), the world's
number one staffing company by sales, generates better margins than
Randstad, partly because it is less dependent on the German market
than Randstad.
The analysts foresee weak results for the second quarter, which
Randstad will publish on July 27. Rabobank has a "buy" rating on
Randstad and a EUR36 target price.
At 1058 GMT, Randstad shares were up 3.8% at EUR 23.07 in a
buoyant market.
Write to Robert van den Oever at
robert.vandenoever@dowjones.com
