NU Online News Service, Nov. 5, 2003, 11:19 a.m. EST – Watson Wyatt & Company Holdings, Washington, says job cuts helped it cope with drops in technology consulting and executive search revenue during the quarter that ended Sept. 30.
The benefits, technology and human resources consulting firm is reporting $12.5 million in net income for the latest quarter on $171 million in revenue, down from $13.1 million in net income on $179 million in revenue for the comparable quarter of 2002.
Watson Wyatt, which starts its fiscal year June 30, calls the quarter that ended Sept. 30 its first quarter.
Benefits earnings fell to $22 million on $104 million in revenue, from $26 million on $102 million in revenue.
Earnings at the technology group fell to $1.4 million on $20 million in revenue, from $4.8 million on $26 million in revenue.
The human capital group, which handles executive compensation consulting as well as executive search services, is reporting a $256,000 operating loss for the first quarter on $10 million in revenue, down from $74,000 in operating income on $11 million in revenue for the first quarter of 2002. Strong demand for compensation consulting services helped make up for a decrease in demand for search services, Watson Wyatt says.
The total number of jobs at Watson Wyatt fell 250, to 3,975, but Watson Wyatt added 30 employees at the benefits group. The benefits group ended the first quarter with the equivalent of 1,660 full-time employees.
Although the job cuts helped hold down operating costs, they also forced Watson Wyatt to post a $2.6 million severance payment charge, the company says.