Actions expected to result in meaningful, sustainable EBITDA margin expansion
Kelly a prominent global specialty talent solutions provider, has revealed its strategic restructuring plans aimed at optimizing the company’s operational model to enhance efficiency and effectiveness. These measures are part of a comprehensive transformation initiative announced in May, with the goal of driving EBITDA margin improvement and fostering long-term profitable growth.
The strategic restructuring involves realigning vital resources within Kelly’s business units, streamlining corporate resources, eliminating redundant organizational layers, and optimizing work processes. By making these structural changes, the company seeks to simplify its operations and free up additional resources for investment in growth. However, as part of these actions, a workforce reduction plan has been implemented, and impacted employees have been notified in accordance with relevant employment laws and regulations. Those affected by the reduction will be eligible for applicable severance, benefits, and outplacement services.
“This is a challenging but necessary step in Kelly’s journey to expedite profitable growth,” said Peter Quigley, president, and chief executive officer. He further stated, “After an exhaustive review of our business and functional operations, we have taken steps to work more efficiently, ensuring long-term profitability. I am confident that the structural improvements we’ve made to Kelly’s operating model position the company to explore new growth avenues, delivering enhanced value to our customers, talent, and shareholders.”
Kelly expects significant expansion of its EBITDA margin to commence immediately, with substantial improvement projected for the second half of 2023 and beyond, as a result of these strategic restructuring actions. The company anticipates incurring a restructuring charge ranging from $7.5 million to $8.5 million in the third quarter of 2023 due to these actions. Further details on the strategic restructuring’s impact on the ongoing transformation, including expectations for EBITDA margin improvement, will be provided by Mr. Quigley and Olivier Thirot, executive vice president, and chief financial officer, during the upcoming second-quarter earnings conference call on August 10, 2023.
