NCC Group PLC (LSE:NCC) shares plunged 18% on Thursday morning as the FTSE 250-listed cybersecurity group warned of a softer market in recent weeks.
In what were otherwise solid results for the first-half to end-November, the company said since the start of the second half it has experienced "a lengthening of the sales cycle, which is leading to delays in buying decisions, work commencement and therefore revenue recognition, particularly in North America and the UK".
As a result, it is now expecting revenue to increase by "only single-digits" at constant currency rates.
But management has decided to use the soft market backdrop to accelerate the implementation of "the next chapter of our strategy" and "reshaping the business", of which the latter seems to mean cutting staff numbers in the near term.
Savings arising from the headcount reduction, combined with the lower revenue, is expected to lead to full-year underlying profit coming in around £52mln, before taking into account the investment being made this year.
The shares dropped 18.7% to 150p in early trades, before rebounding to 170p by late morning, a 7% decline on the day.
House broker Peel Hunt said the new guidance will see a like-for-like cut of 8% to adjusted EBIT consensus forecasts this year.