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CENTENNIAL, Colo. - DHI Group, Inc. (NYSE: NYSE:DHX), a provider of AI-powered career marketplaces with an impressive 86% gross profit margin, today announced a significant reorganization of its operations. According to InvestingPro analysis, the company appears undervalued despite its recent strong performance, with shares gaining over 16% in the past week. The company is restructuring to form two distinct divisions, each dedicated to one of its main brands: Dice and ClearanceJobs. The move is part of a strategy to streamline leadership and tailor operations to the unique market dynamics of each brand.
The restructuring, which is expected to be largely completed by February 2025, will result in an 8% reduction of DHI's total workforce. This downsizing is primarily due to adjustments in team structures and mid-level management. For investors seeking deeper insights, InvestingPro offers comprehensive analysis through its Pro Research Report, which includes detailed financial health metrics and growth prospects for DHI Group among 1,400+ US equities. The reorganization aims to align sales, marketing, and product development functions under dedicated brand leaders, while still maintaining centralized support for human resources, finance, and technology operations.
Art Zeile, CEO of DHI Group, stated that the separation of the Dice and ClearanceJobs organizations is intended to "better deliver results for our shareholders, maximize profitability, and provide stronger long-term strategic options." The reorganization will also involve key leadership changes, with Paul Farnsworth, the current Chief Technology Officer, becoming President of Dice, and Alex Schildt, currently Vice President of Sales for ClearanceJobs, stepping up as President of ClearanceJobs.
The company, currently valued at $103.7 million by market capitalization, estimates that it will incur about $2.2 million in cash charges related to employee severance and benefits, with these charges expected to be recognized in the first quarter of 2025. Cash payments related to the restructuring are anticipated to be substantially completed by the third quarter of 2025. InvestingPro subscribers can access additional financial metrics and 8 more exclusive ProTips about DHI Group's financial outlook. DHI Group expects the restructuring to generate annual cost savings of approximately $4.0 million to $6.0 million, with savings beginning to be realized immediately after the restructuring.
This reorganization also prompts DHI Group to realign its reporting structure and reevaluate its operating segments. The company, known for its patented algorithm managing over 100,000 unique technology skills, enables recruiters and hiring managers to efficiently search for and connect with highly skilled technology professionals.
The information in this article is based on a press release statement from DHI Group, Inc.
In other recent news, DHI Group Inc. reported mixed financial results for its third quarter, with a 6% decline in total revenue year-over-year to $35.3 million. Despite this downturn, the company's ClearanceJobs segment saw a 6% revenue increase, reaching $13.4 million, while another key segment, Dice, experienced a 12% drop in revenue to $21.9 million. Amidst these changes, the company announced the departure of CFO Raime Leeby, with Greg Schippers stepping in as Interim CFO.
In addition to these developments, DHI Group anticipates a tech hiring rebound in 2025, aligning with industry growth forecasts. The company also reported a net loss of $200,000, compared to a net income of $1 million in the previous year. Despite this, DHI Group remains focused on operational efficiency and leveraging growth in the tech hiring landscape.
While the company missed its revenue and bookings targets, it maintains a positive outlook, expecting a decline in Q4 bookings and revenue but forecasting a recovery in tech hiring by mid-2025. These recent developments underscore the company's commitment to navigating through a challenging period while preparing for future growth opportunities.
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