"AMSTERDAM (AP) -- Randstad NV, the world's second-largest temporary staffing services company, said Tuesday second quarter profit fell 89 percent as many companies are looking to cut expenses and reduce staff during the downturn.
Net profit was euro10 million ($14.2 million), down from euro94.1 million a year ago. Sales fell 33 percent to euro2.99 billion.
The year-ago figures were reported as if Randstad had owned Vedior NV -- which it acquired for euro3.5 billion in May 2008 -- for the whole second quarter in both years.
The Vedior buy made Randstad the second largest staffing company behind Adecco SA of Switzerland and ahead of Manpower Inc. of the U.S.
"The U.S. staffing ... as well as our main European markets clearly show some stabilization" when compared with the first quarter of 2009, Chief Executive Ben Noteboom said in a statement.
But demand for high-cost professional workers was weak and "on balance it is too early to declare a beginning of recovery," he said."
Cost cutting continues to be profound. And as I said it is too early in prior earnings announcements by Randstad's competitors such as Manpower, and Adecco, and Robert Half International that a possible double bottom may be present in this economy. We may enter a period of stablization then another down cycle as this stimulus wears off. There has already been calls for another round of stimulus. This not only increases the risk of inflation, and further strain in governmental budgets.
So I continue to be bearish in employment till credit markets become more open to small businesses which generate most of the tax revenue for the economy. Thus creates additional spending and adds to the workforce. At this time there is a limited need for companies such as Randstad, Manpower and Adecco, and Robert Half International especially for higher end workforce.