YouGov looks to cut costs as profits nosedive
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UK-- YouGov has embarked on a wave of group-wide cost-saving moves after reporting a steep fall in profits for the six-month period ending 31 January 2009.
CEO Nadhim Zahawi said today that YouGov had taken “firm action to address the decline in profitability by reducing operating costs and terminating some activities”.
As a result, around 30 jobs will be axed as the firm cuts sales and back office staff in Scandinavia, closes the office running Austrian and Central European online development activities and restructures the custom research teams in the UK. At the last headcount, the firm employed 452 people group-wide, meaning the cuts would amount to 7% of the total workforce.
Staff in Germany will work fewer hours through the German government's Kurzarbeitergeld scheme, a programme that replaces unemployment insurance and pays workers who work shorter hours or are affected by seasonal swings.
“We have decided to scale back investment in non-core activities and areas which are not delivering expected revenue growth,” Zahawi said.
YouGov said the targeted savings of its cost-cutting measures will be around £2.5m, with £0.3m coming through in the current financial year.
The firm warned in February that profits would be “below expectations” and said last week that it was reviewing its UK operations and that a “small number” of jobs were at risk
In results reported today, YouGov's half-year revenue was up 20% to £22.6m from £18.8m but operating profit plunged 69% to £1.3m and profit before tax was down 88% to £363,000.
Zahawi said: “Trading is in line with the board's revised expectations, although, given the ad hoc, project-based nature of much of our client work, the outlook remains uncertain in the current market environment.”
Looking ahead, Zahawi said the recession would “further disrupt” the industry and YouGov would “continue to monitor performance closely and take further actions if required”.
Author: James Verrinder
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