Korn Ferry (NYSE:KFY) recognized as the largest global executive recruiting firm, has reported an overall decrease in revenues and is undergoing restructuring according to the organization’s current 8-K filing.
The company experienced a 3% year-over-year decrease in Q2 fee revenue, totaling $704.0 million. This decline was attributed to reduced demand in the organization’s permanent placement talent acquisition offerings, including executive search and recruitment process outsourcing (RPO).
Business Unit Performance
Korn Ferry’s executive search unit witnessed a 7% drop in fee revenue to $203.0 million. However, the company’s professional search & interim sector reported a 3% increase in fee revenue, reaching $138.4 million. Consulting and digital services also experienced growth, with consulting fee revenue rising modestly to $177.8 million and digital to $97.1 million.
Restructuring charges, amounting to $63.5 million, were a significant factor in the quarter’s financial results, as Korn Ferry realigned its workforce.
Leadership and Organizational Changes
In response to these challenges, Korn Ferry has made several leadership shifts. Jeanne MacDonald was named CEO of the RPO business, and Mathias Herzog took over the firm’s digital solutions. The company also completed an acquisition of Salo LLC, a provider of interim professional services in finance, accounting, and HR.
Slide May Continue
Korn Ferry expects an additional decrease for Q3, estimating fee revenue to be in the range of $645 million to $665 million, with diluted earnings per share between $0.87 to $0.95. On an adjusted basis, diluted earnings per share are projected to be between $0.96 to $1.02.
This outlook is based on the assumption of no major pandemic-related lockdowns or significant changes in global geopolitical conditions.
Korn Ferry’s recent announcements and financial results highlight the company’s response to current market conditions. The firm’s restructuring efforts, leadership changes, and strategic acquisitions are indicative of its approach to navigating a complex and dynamic business environment.
The effectiveness of these strategies in sustaining Korn Ferry’s position in the executive recruitment and consulting sectors will be an area of interest for observers and stakeholders in the industry.