First Consulting Restructuring Operations

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First Consulting Group Inc. said Tuesday it is cutting jobs, including management positions, and closing offices as part of a restructuring and cost-reduction program to improve profits in 2006.


The Long Beach-based provider of software and services for the health care industry said it has reduced the number of vice presidents in the company by 20 percent. Other non-billable and under-utilized positions were also cut, but nearly 60 percent of the reduction is comprised of management-level positions. The total head count reduction should result in about $11 million in annual savings. The company employed nearly 2,435 workers in 2004.


First Consulting also is closing two offices and significantly downsizing its space in another facility. Those cuts are expected to save $700,000.


First Consulting’s board also has hired executive recruiter Korn/Ferry International to conduct a search for a new chief executive. Luther J. Nussbaum stepped down as chief executive on Nov. 4 after serving in the position since 1998 and becoming chairman in 1999. Steven Heck, president of First Consulting since 1999, is the interim chief executive.


In addition to the personnel announcements, the company said 2006 first-quarter revenue would decline to between $60 million and $63 million from expected fourth-quarter revenue of about $70 million due to the completion of an outsourcing contract. Profits, however, are expected to improve in the quarter, although the company did not disclose any numbers. Analysts had expected fourth-quarter revenue of $72.7 million and first-quarter revenue of $65.4 million.


Shares of First Consulting were down 2.4 percent to $5.75 in late-afternoon trading on Tuesday.

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