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Jill Lerner
Journal Staff
Heidrick
& Struggles International Inc., one of the world's largest
executive search firms, has closed its Wellesley office
and consolidated operations at its Boston location as it
grapples with a downturn in the executive search industry
that has hit the high-tech-oriented Boston market especially
hard.
After laying off roughly 40 of its nearly 60 staffers in
Wellesley during two rounds of layoffs in 2001, Chicago-based
Heidrick last month closed that office and reassigned its
remaining Wellesley personnel to the company's Federal Street
offices in Boston, spokesman Eric Sodorff confirmed.
The downtown Boston office, which itself lost staff after
the layoffs in June and October, now has about 35 employees
total, he said.
In all, Heidrick laid off nearly 30 percent of its global
work force, or more than 600 people in 2001 -- a year widely
considered the worst in nearly a decade for the executive
recruitment industry.
"What
we saw was a complete reversal of fortune," said Joseph
Daniel McCool, editor-in-chief of industry publication Executive
Recruiter News, based in Fitzwilliam, N.H. Industry revenue
on the whole was probably down about 30 percent, following
consecutive years of double digits growth starting in 1992,
he said.
"The
year 2001 was most certainly the most difficult and challenging
and defining year in the executive search business in its
entire history," McCool said.
Heidrick's consolidated revenue figure for the fourth quarter
of 2001 was $88.5 million, down 40 percent from the $148
million the company posted in the same quarter a year ago.
McCool said he believed Heidrick felt a little more pain
than most, as the company had built up its Boston-area practice
in recent years to capitalize on the region's wealth of
high-tech companies -- a strong suit of Heidrick's, he said.
When those companies became among the first victims of the
economic downturn, the fortunes of their vendors suffered
similar fates.
"It's
an ecological kind of thing, where one thing affects another,"
said David Zell, president and CEO of Waltham-based Logix
Inc., a 26-person search firm for the high-tech industry,
who said his own company's revenue fell by about 40 percent
last year from the year before.
Nicholas Hurd, managing director of the Boston office of
New York executive search firm Russell Reynolds Associates
Inc., said he reallocated his high-tech recruiters in the
last quarter of 2000 in recognition of that sector's troubles.
Hurd said high-tech and financial services are key targets
for his office, and recruiters were reassigned out of Internet
recruiting to other high-tech areas such as software and
telecommunications, as well as non-tech areas.
While he said the tactic succeeded, and has spared his 10-person
office from layoffs, Hurd said the Boston market for executive
search continues to be difficult.
"My
observation is that many of our clients have been trying
to do things on their own," he said.
Of course, any upswings are relative, coming as they do
after a significant drop in demand, but most recruiters
say things are picking up, if in some cases only marginally.
For
example, said Zell, "February was certainly (better) than
the last three months.
"January
was OK," Zell said. "It was better than December and November."
However, Seth Harris, managing director of technology and
venture practices in the Burlington office of Cleveland-based
Christian & Timbers, said his firm has launched 12 new high-tech
placement searches since January, putting it on par with
1999 performance.
Nonetheless, many local executive-search insiders say they
don't expect a substantial pickup in business before spring.
But when the upturn does come, Boston recruiters should
be among the first to feel it, says Executive Recruiter
News' McCool -- mostly because of the area's rich talent
pool, wealth of emerging technology companies and geographic
proximity to Europe.
"I
think Boston will be among the first markets in executive
search to break out of the recession," McCool said.
Copyright
2002 American City Business Journals Inc.
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