Daily Research News Online no. 5594 - Harris Consolidates UK Sites as MD Departs

Harris Consolidates UK Sites as MD Departs

June 8 2006

Harris Interactive has announced a reorganisation of its UK operations including the closing of facilities in Macclesfield and Stockport, and the loss of between ten and fifteen jobs. The company also announced the resignation of its UK Managing Director Aled Morris.

Harris says the moves are designed to 'match costs with current revenue levels and to set the stage for profitable growth in Europe'. The firm has taken over several UK agencies in the last few years and Global President and CEO Greg Novak had already hinted at the need for rationalisation.

Operations from the Macclesfield and High Lane, Stockport facilities will be consolidated into the firm's Hazel Grove location, also in Stockport, with completion expected by the end of this month and costs not expected to exceed $50,000. In connection with the facilities closures, the company anticipates a reduction in its UK staff by 10-15 employees by the end of this month.

UK marketing, healthcare and human resource teams are to be reorganised, with marketing now centered at European headquarters in Brentford. New directors of marketing and public relations will be hired for this site, to raise awareness of the Harris Interactive brand in Europe.

The UK-based Healthcare division will now be part of the UK business and report to George Terhanian, president of Harris Interactive Europe, while the UK Human Resources team will now jointly report to Terhanian and Dennis Bhame, Corporate EVP of Human Resources.

According to Novak, 'Our US and UK management teams now believe that our European business is well positioned for future success. We've implemented a plan that will create a solid base on which to build a sustainable, profitable and unified business.'

The Company announced plans to hire additional outside sales personnel in the UK. 'In addition to the cost-cutting measures, it's imperative that we also get our sales engine up to speed and start generating good top-line growth,' Novak said.

The staff reduction will incur estimated cash severance charges of between $250,000 and $300,000. Executive VPO and CFO Ronald E. Salluzzo says the total restructuring charge during the firm's fourth fiscal quarter of 2006 is in line with previous estimations and will not affect guidance issued in May.

Morris will leave the Company on June 30 and return to the personnel/recruitment industry, joining a firm as a principal partner. Terhanian, who will assume Morris' responsibilities, said that 'After several months of discussion with Aled, it became clear that the pull of the recruitment industry was just too strong to compete with.'

The company's home page is at www.harrisinteractive.com .