US – Watson Wyatt & Co. says it cut 100 jobs in July and that fourth-quarter revenues fell 2.3%.
The firm, the US affiliate of Watson Wyatt Worldwide, said in its fourth-quarter earnings report that it took an estimated 3.3 million-dollar (2.9 million-euro) charge “in connection with July 2003 staff reductions affecting approximately 100 associates across all practices”.
A spokeswoman for Watson Wyatt in the US said the firm is still hiring, for example at college campuses. She termed the cuts “rightsizing”. All the cuts were in north America and were at "all levels".
The company, whose earnings report had been delayed due to billing irregularities, said that its fourth-quarter revenue fell by 4.3 million dollars, 2.3%, to 178.4 million dollars from 182.7 million dollars.
It said fourth-quarter income from continuing operations rose 300,000 dollars to 12.7 million dollars against 12.4 million dollars in the same quarter in 2002.
Revenues for the fiscal year ended June 30 fell to 709.6 million dollars from 710.5 million dollars.
Watson provided more details about the billing problems. “The billing irregularities involved four clients and arose from hours inappropriately reported in client billings that did not match the company's time reporting system.”
“With the assistance of outside legal counsel, the company conducted a review of this issue to ascertain whether similar issues were present with other clients. No other cases were found.
“As a result, the company reduced fourth quarter fiscal 2003 revenues by 1.8 million dollars.” The spokeswoman was not able to say whether anybody was going to be fired.
"Given conditions in the marketplace, we are pleased once again to post year-over-year earnings growth and continue our excellent cash performance," said president and chief executive John Haley.
"Superb client retention and rigorous cost management continue to drive our results and position us well to take full advantage of a turnaround in the economy."
It said that during most recent quarter that it contributed 10.0 million dollars to its US qualified pension plan. The payment brings its total US pension contributions to 22 million dollars in the 2003 fiscal year.
Looking forward, Watson said it expects revenue to be five to six percent lower in the first quarter “due to continued lower discretionary client spending impacting the Technology Solutions and Human Capital Groups.”
“Watson Wyatt's outlook for fiscal 2004 remains cautious and assumes modest revenue growth of approximately one percent, based on new business anticipated from current marketing activity in the second half of fiscal 2004.”