Workstream Changes CEOs Again

Nov 2, 2009
This article is part of a series called News & Trends.

workstreamFinancially battered Workstream has changed leadership again, bringing back its co-founder and board chairman Michael Mullarkey as chief executive officer. He replaces Steve Purello, whose resignation was announced this morning.

Purello’s departure marks the third change in the CEO office since Mullarkey left the job in 2006. His successor, Deepak Gupta, was gone less than a year later, succeeded by in February 2008 by Purello, who held general manager positions with Workstream subsidiary 6FigureJobs and the career networks business. Purello had been with the company since 2003.

The company has also gone through two CFOs and had a complete change in every C-level position. This morning’s announcement said Andrew Hinchliff was rejoining the company as senior vice president of North American sales. He previously held the job from 2001-2003.

Workstream hasn’t made a profit at least since it began reporting its numbers publicly in 1999. For the most recent quarter, it lost $360,000 on sales of $4.2 million. That compares to a $2.1 million loss on sales of $5.6 million for the same period in 2008.

(The company’s fiscal year runs from June 1 through May 31, so the most recent quarter is the company’s first for the 2010 fiscal year.)

In its last fiscal year, Workstream lost $4.9 million compared to the $52.6 million loss for the 2008 fiscal year. That loss included a $28 million hit for a writedown of goodwill.

An expected merger with human capital management and outsource payroll company Empagio fell apart in mid-June 2008.

Workstream stock priceThe financial turmoil has taken a toll on Workstream’s stock price, which sank to an all-time low of  2 cents a share last December. Though it recovered and rose to a year high of 48 cents in May, today’s price is 28 cents a share, down a penny on the day.

The stock trades on the Over-the-Counter Bulletin Board, an exchange typically for very low-priced stocks,  following its delisting by NASDAQ in the spring for failing to meet exchange requirements.

Despite all that, Workstream’s products have won praise from HR analysts. TalentCenter 7.0, released in fall 2007, was called a “truly integrated” HR platform and “not just a bunch of disparate applications” by Leighanne Levensaler, principal analyst with Bersin & Associates.

Job board 6FigureJobs won a place on Peter Weddle’s User’s Choice popularity list this year. It was also named a top 100 job site by Weddle.

And its Workstream Compensation won HRarchitect’s “Beauty Pageant” in April for compensation management systems.

In assuming the CEO position, Mullarkey said in a prepared statement that, “It is my firm belief that this company, now 10 years of age, has significant opportunities for substantial growth. The Board of Directors has asked me to return as our leader in order to accelerate the timelines for this growth, and for a return to long-term profitability, which our shareholders so rightfully expect.”

This article is part of a series called News & Trends.
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