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Declining Demand Prompts Manpower to Withdraw Profit Forecast

Dec 22, 2008

man-manpower-logoAnother dismal forecast, and this one has nothing to do with the heavy, wet weather blanketing much of the country.

The forecast is from Manpower, which announced Monday it might be hitting the unemployment line soon. Well, not quite, but the Milwaukee-based staffing company did announce it is withdrawing its revenue and earnings guidance for the fourth quarter of 2008.

Executives have become “markedly more pessimistic” and Manpower chairman and CEO Jeffrey Joerres is no exception. He blames a deteriorating economic environment and anticipates “demand for our services will be especially weak in December as we are hearing that many of our light industrial clients are taking prolonged plant shut downs around the holidays compared to last year.”

He’s referring, of course, to the many companies planning longer-than-anticipated plant closings: General Motors, Chrysler, and Ford Motor Co, troubled automakers that are extending their holiday plant shutdowns; Caterpillar, Inc., the heavy equipment maker that is temporarily closing factories and cutting salaries; FedEx, which is delivering a 5% pay cut for salaried workers and stopping contributions to employee retirement accounts; and Newell Rubbermaid, Inc. the Atlanta-based maker of Rubbermaid containers, Calphalon pans, and Graco baby products, which is planning temporary shutdowns at its worldwide factories and cutting almost 1,000 jobs.

As fewer companies need temporary workers, Manpower may face internal layoffs and office closings. The $21-billion company, with 4,500 offices in 80 countries, estimates a fourth-quarter revenue decline of 9% to 11%.

It wasn’t a much better day for Gevity, whose stock was plunging about 29% mid-day. Stock prices of Volt, Spherion, and other staffing firms were behaving poorly. Salary.com, on the other hand, is up sharply. It’s buying back stock and has completed an acquisition of Genesys.

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