Korn Ferry Posts Flat Year-End Revenues; Q4 Down 10.2 Percent 

Largest search firm posts fiscal year-end revenues of $1.92 billion as it navigates pandemic and economic crisis. $300 million cost savings efforts include pay cuts and furloughs, with “more change” in the works, according to CEO Gary D. Burnison. Let’s go inside the numbers.

July 3, 2020 – Korn Ferry (NYSE:KFY) has posted 2020 fiscal year-end revenues of $1.92 billion, flat from a year ago. The Los Angeles-headquartered executive recruiter and leadership consultant – the largest globally and in the Americas as ranked by Hunt Scanlon Media – also reported fourth quarter revenue of $490.8 million, a decline of 10.2 percent. The firm reported restricting charges of $40.5 million in its fourth quarter. Net income attributable to Korn Ferry was $104.9 million in the 2020 fiscal year, while the firm reported a net loss on $0.8 million in Q4.

The fiscal fourth quarter was impacted by COVID-19 with revenues falling 19 percent in Asia Pacific, 17. 2 percent in Latin America, 12.5 percent in Europe, the Middle East and Africa, and 10.1 percent in North America.

“As we manage our way through COVID-19, our Korn Ferry colleagues are showing their resilience by quickly pivoting to a different way of working – whether it’s from home or the rapid transition to the virtual delivery of our services and solutions to clients,” said Gary D. Burnison, CEO. But Mr. Burnison notes this: “I truly feel that over the next two years there will be more change than in the last 10 years. Different work needs to get done, and work needs to get done differently.”

That, he said, represents a big opportunity for Korn Ferry. “As an organizational consulting firm, Korn Ferry is committed to promoting conscious inclusion – enabling all people and their organizations to exceed their potential – and to exceed potential, people need an abundance of opportunity, development and sponsorship. Korn Ferry is the right firm at the right time to help organizations drive performance through change, and I have never been more proud of our company.”

Job Cuts and Furloughs

In April, Korn Ferry initiated a plan intended to adjust its cost base to the current economic environment and to position the firm to invest into the recovery. This includes a reduction in workforce (which is expected to be substantially completed by the end of the fourth quarter of fiscal 2020), the temporary furlough of certain employees, salary reductions across the organization, and other cost saving measures relating to general and administrative expenses. Korn Ferry initially expects the pay cuts and furloughs to be effective through Aug. 31.  In addition, Korn Ferry’s named executive officers and board of directors previously agreed, effective May 1, to reductions in base salary and cash retainer, respectively, through Aug. 31. In mid to late August, the firm will evaluate whether the furloughs and all pay cuts should be continued.

Korn Ferry said that the plan will initially reduce its annualized cost base by approximately $300 million and is expected to result in an estimated pre-tax charge of about $55 million to $65 million, consisting of severance and related employee benefit payments. These charges are expected to include about $45 million to $50 million of cash expenditures, of which about $40 million to $45 million will be paid in the fourth quarter of fiscal 2020 and the first quarter of fiscal 2021, with the remainder being paid between the second half of fiscal 2021 and fiscal 2023.

New Chief Diversity Officer

Last month, Korn Ferry named Michael Hyter as the firm’s new chief diversity officer. Mr. Hyter joined Korn Ferry in 2012 after the acquisition of Global Novations, a leading diversity and inclusion firm in which he served as president and managing partner. Since the acquisition, Mr. Hyter has played an instrumental role in growing the breadth of Korn Ferry’s D&I business. “I’m thrilled Mike is assuming the role of chief diversity officer,” said Mr. Burnison. “He is the right person, at the right time to further our embrace of diverse perspectives and backgrounds and drive meaningful change within Korn Ferry and with clients.”

“I’m a true believer in the power of D&I and the impact it can have on a company’s culture, values and growth,” said Mr. Hyter. “A critical factor to any company’s success is having a diverse mix of talent who can take on the challenges and opportunities they face now and in the future.”

Virtual Recruiting Solution

In response to the COVID-19 pandemic, Korn Ferry also recently launched Korn Ferry Recruit, a fully integrated, virtual technology solution for high-volume hiring. Nimble uses best-in-class AI, along with the proven recruitment intellectual property of Korn Ferry. The firm said that the new solution “is designed to leverage a client’s brand, shifting to a candidate-driven experience by sourcing, attracting, assessing and selecting the right people for the job at an affordable cost-per-hire.” It is part of the firm’s line of Nimble solutions.

Conducting a Job Search During a Global Pandemic

Americans displaced by the coronavirus crisis continue to file for unemployment benefits in historic numbers sending millions of people looking for new jobs. “As we find ourselves in unprecedented times, many mid- to senior-level professionals are unsure how to proceed with their job searches,” said Amanda Sonis Glynn, an advisor within the career services division of Koya Leadership Partners, in the new report. In addition to executive search, Koya offers career advising services to help people design a strategy for achieving their career goals, polish a resume, prepare for interviews, and more.

“Nimble is an efficient and effective tool for organizations that need to quickly ramp up high-volume hiring,” said Jeanne MacDonald, president, Korn Ferry global RPO solutions. “Nimble not only helps widen the net of qualified candidates, it creates success profiles that ensure the people with the rights skills are short-listed. Nimble offers a positive candidate experience in a virtual environment that increases the chances the candidate will accept an offer and stay on the job.”


“Although COVID-19 has been with us for a number of months, significant uncertainty about its ultimate impact on society and the global economic environment remains,” Korn Ferry said. “The pandemic has spread across the globe, infecting different parts of the world at varying points in time and with varying levels of intensity. The response, out of necessity, has been conducted in large part at a very local level, with societies and economies closing and reopening at different points in time and in different ways.”

“As the world begins to slowly and sporadically reopen, we are seeing a resurgence of COVID-19 cases in a number of geographies,” Korn Ferry said. “The extent to which measures taken are reinstated and new and incremental measures are put in place, and the manner in which authoritative bodies continue to respond, remains a major unknown. While our clients and colleagues are demonstrating real resiliency as they find new and different ways of working together, the unprecedented nature of what we are currently experiencing, combined with conflicting and ever-changing data points, continues to cloud the near-term predictability of our business.”

Korn Ferry said that “consequently, and consistent with our approach to the fourth quarter of FY’20, we will not issue any specific revenue or earnings guidance for the first quarter of FY’21. We plan to reassess the suspension of our guidance once we are comfortable that the coronavirus uncertainties have largely passed.”

Shares of Korn Ferry traded up $0.13 on Thursday, reaching $30.50. According to Zack’s 193,674 shares of the stock traded hands, compared to its average volume of 448467. Shares of Korn Ferry Thursday were trading at $30.50. The firm’s 50 day moving average is $29.37 and its 200-day moving average is $34.87. Korn Ferry has a 12-month low of $30.39 and a 12 month high of $43.99. While on yearly highs and lows, Korn Ferry’s today has traded high as $32.00 and has touched $30.39 on the downward trend.

Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor  – Hunt Scanlon Media

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