Consulting firm Huron is laying off 145 employees and plans to shrink its office space as it deals with the impact of COVID-19 on its workforce and clients, particularly those in the health care and education segments.
The Chicago-based firm, which reported a decline in third-quarter earnings Monday, also said it would delay 2021 merit increases for all employees as part of a fourth-quarter restructuring plan.
On an earnings call with financial analysts, Huron executives said most of the layoffs are in the health care and education segments, along with 20 positions eliminated on the corporate team. The majority of the layoffs will take place by the end of the year. Employee severance and benefits will cost the company $3.5 million to $4.5 million.
The company also said it reduced salaries, bonus and stock compensation expenses for some employees during the third quarter.
During the earnings call, CEO James Roth said the company contemplated layoffs early in the pandemic, but held off taking any action because of modest hope of the pandemic easing and a sense of normalcy returning in the fall.
“I think as the summer rolled on, it became increasingly apparent, particularly in September as we started developing our September forecast, that things were not going to be back to anywhere close to normal during this current calendar year,” Roth said.
Huron also plans to shrink its office space, but said the amount and timing of those decisions and costs will depend, in part, on its ability to terminate or modify leases or sublease space.
In Chicago, Huron leases just under 140,000 square feet at Union Tower, a 17-story office building at 550 W. Van Buren St. Huron restructured the lease last October, dropping about 20,000 square feet but extending the term by five years, to 2027. Its landlord is Vancouver-based Onni Group, an active residential developer in Chicago that also owns a few office buildings in the city.
Allie Bovis, a company spokeswoman, declined to provide specific information on how the restructuring would affect Huron’s workforce in Chicago and office space needs.
During the earnings call, executives said Huron likely would reconfigure some of its floor plans to allow for more flexible space and a hoteling type of environment. It is an approach growing in popularity among corporate tenants as more people work from home and do not need their own desks in offices.
“We did a fair amount of evaluation of our usage of our existing space,” Roth said. “And I think without knowing exactly what’s going to happen, we all know that I think it’s very unlikely that we all go back to work in exactly like we did prior to COVID.”
“I also don’t think it’s feasible that we’re all going to stay home forever,” he said.
The company also said it would divest its UK-based life sciences drug safety practice.
Huron reported third-quarter net earnings of $11.1 million, or 50 cents a share, compared with $13.7 million, or 61 cents a share, a year ago. Revenues fell 6.4%, to $205.3 million.
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