Operator: Next question comes from Trevor Romeo with William Blair.
Trevor Romeo: Hi, good morning. Thanks so much for taking the questions. Just one maybe on Japan which might get lost in the shuffle a bit given all the focus on Europe but I think it’s been a real bright spot. The performance there has been strong and consistent. So could you maybe just talk about the drivers behind the strength there in Japan. What kind of outlook you have there in the near term?
Jonas Prising : Thanks for bringing that up, Trevor. It’s the 37th consecutive quarter of growth in Japan and I think Japan is a really interesting example of a country that is struggling demographically and has a shortage of labor, but we’ve managed to position ourselves both from a Manpower and Experis perspective as really the experts in finding and creating talent at scale. And that’s really been one of the key factors of how we’ve made progress in Japan is of course excellent recruitment and delivery capabilities, but each of our brands also has a very strong reskilling, end-up-skilling arm of that brand. So we are generating a lot of talent with marketable skills and scale in Japan, and that is really a main factor of the progress that we’ve seen.
We’ve also moved into some interesting healthcare areas, elder care, as well as childcare in Japan. Given the aging population, we’ve seen that as a very good opportunity and that’s been an investment that we’ve made over a number of years and that is starting to take hold and we think that will continue to be an important part of our business. So the team in Japan has done an excellent job really finding the opportunities that exist in a market where you have an aging demographic, a shrinking workforce and being seen as a solutions provider by not only finding great talent but creating talent at scale. And that’s exactly what we intend to do as we see similar trends play out both in Europe and in the US through our experienced academy as well as our Manpower MyPath programs making sure that we are known as the company that has great ability to find but also to create the needed talent for our clients which helps us deliver the best talent in the market in time and at speed.
Jack McGinnis: And Trevor, I would just say for the first quarter guide for Japan, Japan has been running at days- adjusted just about double digits to high single digits and we anticipate that for the first quarter maybe closer to the very high single digits days-adjusted so very strong outlook for the first quarter for Japan.
Trevor Romeo: Okay, that’s great. Thank you both. And then just quickly on SG&A. I guess where do you think you are in terms of cost management? It sounds like you took some additional headcount reductions this quarter. How much room do you think you have for additional reductions whether the headcount or other avenues if the sluggish macro kind of continues?
Jack McGinnis: Sure. I’d be happy to talk to that very quickly. So I think we feel good about the actions we’ve taken. We did, we talked about the additional headcount down. Personnel costs are about two-thirds of our overall cost so as we end the year, we’re down 9%. We moved another 3% down in the fourth quarter. So I think we feel that we’ve taken the necessary actions for the most part based on the current environment. Certainly, we’ve talked a lot about Germany and the change and improving the trend for that business once we conclude the Proservia here. But I think we feel pretty good, but at the same time, continuing to balance that. So as Jonas said, we want to be prepared for the upturn when it happens. So it’s a balance, and we want to make sure we have the right sales personnel and the right producers for when that happens.
And so we are balancing that carefully, but you did see additional cost takeout in the fourth quarter, and we expect that trend to continue into the first quarter on a trending basis.
Operator: The next question comes from Heather Balsky with Bank of America.
Heather Balsky: Hi, good morning. Thank you for taking my question. You talked with the first question in the Q&A about the U.S. and some of the signs of stabilization. I’m curious if you can elaborate further which markets beyond the U.S., you kind of feel like things have stabilized. And then a little bit more color on what you’re looking at to get confidence in things stabilizing, just given all the macro challenges we see right now. Is it data out there? Is it what you’re seeing in the underlying business through January? Is it what you’re hearing from your customers? Just helpful to get your thought process. Thanks.
Jack McGinnis: Sure. Heather, I’ll talk to that very quickly. So I think you’re right. U.S. is our second biggest business. We did see that stabilized in the second half of the year. I think the other big one, number four, business for us is the UK. UK went from minus 15% days adjusted to minus 13% in Q4. So slight improvement, seeing underlying stabilization. We expect that to continue based on the guide that we gave into the first quarter. So I’d say of the bigger markets, those are the two big ones that we’ve seen good stabilization in the second half of 2023. And as I’d say on activity levels going into the first quarter, I will say not quite in that same camp a little bit further decline would be France and Italy, but very modest.
So we’re not talking about those markets seeing significant pullbacks. We’re seeing more gradual easing. And so that’s in our guide that takes France from minus four in Q4 to minus five in Italy, moves from that minus three days-adjusted to a little bit bigger of a decline into the first quarter as well. So those are the main countries when I think about stabilization of the bigger countries, we’re in. And to your point, I think the second part of your question was what type of data points would be good to monitor as we look at that potentially changing. I think on the Manpower businesses, manufacturing PMIs are always a pretty good read through in terms of demand. And so I’d say continuing to look at that. As we sit here today, Europe continues to be in the 43 to 44 range, so quite below the 50, in the US as well.
