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Heidrick & Struggles Announces Restructuring Charge, Management Changes

Heidrick & Struggles Announces Restructuring Charge, Management Changes

Heidrick & Struggles International, Incthe leadership advisory firm providing executive search and leadership consulting services worldwide, announced today strategic initiatives and management changes designed to strengthen the company and better position it for long-term success. The company expects to realize approximately $20 million -- $25 million in annualized savings from the strategic initiatives.

"Our actions will allow us to focus even more sharply on driving our leadership advisory strategy, while enhancing our competitiveness and delivering value to our shareholders," said Chief Executive Officer L. Kevin Kelly. "While the market continues to be challenging, particularly in Europe, we are adjusting to these conditions in a way that positions us for improved performance in the near term and strengthens our ability to invest in future growth."

Key elements of the strategic initiatives include:

- Reducing the company's global workforce by approximately 10 percent.

- Decreasing real estate expenses and support costs by consolidating or closing 13 of the company's smaller locations across its global network, predominantly in the EMEA region (Europe and Middle East).

- Strengthening the company's regional operational management to complement its existing industry practices.

Collectively, these changes are designed to help the firm focus its resources and invest in the proper footprint to best serve its clients for the future.

Additionally, the company announced the following management changes:

- Timothy C. Hicks has been appointed as the company's Managing Partner, Operations -- a new role with responsibility for the company's regional operations as well as steering the human resource function. Since joining Heidrick & Struggles in 2002, Mr. Hicks has held several leadership roles within the company including: Partner-In-Charge of the Chicago Office and Sector Leader, Global Automotive. Mr. Hicks is a seasoned veteran with 27 years of experience in the executive search/leadership advisory industry.

- S. John Kim has decided to resign from his current position as Managing Partner, Global Practices, effective October 14, 2011 to return to a market-facing role within the company's Financial Services Practice. A replacement for his former position has not been named. In the interim, Global Practice leaders will report directly to CEO Kevin Kelly.

- Richard J. Caldera has resigned as the company's Chief Human Resources Officer, but will remain with the company until December 31, 2011 to ensure an orderly transition of his duties and responsibilities.

The company expects to record a one-time pre-tax restructuring charge of approximately $18 million during the 2011 fourth quarter related to its strategic initiatives. The charge primarily relates to employee termination costs, the majority of which will be paid in the 2011 fourth quarter, but a portion of the charge relates to the closing of several of its smaller offices. The company expects to partially offset the restructuring charge with savings that will be realized during the 2011 fourth quarter.

Heidrick & Struggles will release its 2011 third quarter results for the period ended September 30, 2011 on Tuesday, October 25, 2011 and hold its quarterly conference call that morning at 10:00 a.m. (EDT) via its website. The impact of the restructuring charge and the current economic outlook for Europe has prompted the company to revisit the carrying value of goodwill related to its European business. Depending on the results of this review, which will be reported in the 2011 third quarter release, the company could record a non-cash impairment charge of its goodwill and intangible assets as high as $25 million.


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