Recruitment advertising firm TMP Worldwide collapses into administration

It is understood that the company's five offices in Sydney, Adelaide, Brisbane, Melbourne and Perth have been closed.

A skeleton staff working in the Sydney office met yesterday to discuss how outstanding work would be handled. It is understood that any booked advertising will be transferred to an other media buying agency.

The business is now in the hands of administrators from insolvency firm KordaMentha. Representatives from the firm were not available for comment prior to publication.

The business, which employed around 200 people at its peak, is believed to have struggled for the last 12 months due to the downturn in the recruitment sector caused by the global financial crisis.

One industry source said the company's staff took a 20% pay cut about 12 months ago in an effort to help the business trade through the downturn.

The company was owned and run by Alex Walker, the former chief financial officer of TMP Worldwide.

He bought the business in 2006 from US based recruitment advertising company Monster Inc, who arrived in Australia 10 years earlier through the purchase of Neville Jeffress Advertising.

The company was a major supplier of recruitment advertising services to governments around Australia. Three of the four awards it won at Fairfax's Employment Marketing Awards were for government bodies, including best campaign (for Queensland Health), best integrated campaign (for the South Australian Government) and best promotion of regional careers (for Western Australia's prison department).

The collapse of the firm can also be taken as another sign that the print media's famed "rivers of gold' from classified advertising are drying up. Industry sources say TMP was a major buyer of recruitment advertising space in Fairfax and News Corp newspapers.

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written by Mike Williams, March 18, 2010

There may be lots of reasons why this collapse happened - but it is a perfect example of how value doesn't just "disappear" overnight. They may have been worth more as a going entity yesterday, last week or last month, but the real loss of value hasn't happened as a result of being placed in administration, but rather the steady decline in cash flow as a result of many decisions over several years. It is not just a GFC casualty, but also a victim of changing market trends (shift of advertising from print media to online), lack of new or effective strategies to deal with the situation (perhaps this industry is just too hard to operate profitably), competition and many other circumstances.


Business owners must realise value doesn't always get destroyed in an instant - there are often a string of decisions that lead to an eventual collapse.

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written by gardey, March 22, 2010

Unless "Classified" Agencies start to do business smarter (ie improve their gross margin and reduce their extreme overheads) by introducing clever technology and having a sales service model that works, they will continue to fail - watch this space!
Its not just TMP - (available by public record) Adcorp had a 165m in sales last year and ended with and EBIT of $270K. Other classified agencies are overstaffed using the traditional agency staffing model and try to recoup by charging costly fees to clients.
The rivers of gold aren't gone - there will always be rivers of gold, the GFC isn't to blame - these businesses are poorly maintained.
I cant help but think that Mikes comment above doesn't ring true for a lot of businesses in this industry but my business is going to attempt to pick up the pieces that TMP have left behind and help by looking at hiring some of their (effective) staff - 2 new clients so far and counting.