New York-based Monster Worldwide Inc. (MWW) is an online recruitment firm and the parent company of Monster.com, the leading career website in the world.
Yesterday, the company announced plans to open a new technology center of Excellence & Innovation in Cambridge, Massachusetts, and make certain organizational changes. Monster plans to add more staff to this center in the foreseeable future. As part of organizational changes, the company will eliminate approximately 160 positions within the product and technology group on a global basis.
Monster is now actively recruiting for approximately 80 new technical positions to be located in the Cambridge center, with potential capacity for adding a total of 170 new positions at this center. The company already has technological centers in Massachusetts, California, Czech Republic, Malaysia and New Delhi. Monster believes that Cambridge is a strategic location for its business.
The company‘s business has been adversely affected by the economic downturn. The weak global economy has significantly impacted hiring demand in the past eighteen months. Companies have reduced headcount, frozen hiring and delayed recruitment-related decisions. Many key industry verticals that Monster serves, such as financial services, retail, manufacturing and construction, have been severely hit and might not be able to renew their contracts with the company.
Moreover, we believe competition has intensified in the industry over the last few years and taken away market share from Monster. While Monster once had a dominant position, there are now several national competitors (i.e., CareerBuilder and HotJobs) as well as niche sites (i.e., Dice, JobsintheMoney, TheLadders, SnagAJob, etc.). A number of premium recruiters have reduced their use of job boards in favor of alternative social media sites such as LinkedIn.
In response to this downtrend, the company has justifiably been repositioning itself and making efforts to improve its technology in order to improve the experience for both job seekers and corporate clients. We maintain our Hold on the stock.
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