Korn Ferry To Cut Staff, Reduce Office Footprint
Consulting firm Korn Ferry will reduce its employee headcount and shrink its global office footprint, spending between $45M and $50M to reduce underutilized office space and dismiss some of its workforce, according to a Securities and Exchange Commission filing.
The plan was put in motion Jan. 11, and the company expects to complete it by the end of the 2023 fiscal year.
“The Plan is expected to reduce the Company’s annualized cost base by approximately $45.0 million to $55.0 million (after taking into account new hires in connection with the rebalancing of the Company’s workforce) and is expected to result in an estimated pre-tax charge of approximately $45.0 million to $50 million, consisting of severance and related employee benefit payments and lease termination costs," the filing stated. "These charges are expected to include approximately $30.0 million to $35.0 million of cash expenditures, the majority of which will be paid during the remainder of fiscal 2023.”
The filing also stated that the employee dismissals are expected to impact less than 5% of the company’s total employees. As of June 2022, the company had 10,779 employees, according to a 10-K filing, meaning the layoffs could impact around 538 employees.
That same 10-K stated that in addition to the company’s corporate headquarters in Los Angeles, it leased 104 offices worldwide, which totaled 1.2M SF. Of those leases, the company notes that the remaining terms varied between one and 10 years. It is unclear how much space Korn Ferry intends to vacate.
Korn Ferry could not be reached for comment.