<PAGE>

================================================================================

                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                   FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
    ACT OF 1934

    For the quarterly period ended: December 31, 2001

                                      or

[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
    EXCHANGE ACT OF 1934

    For the transition period from ____________ to ____________

                        Commission File Number: 0-20735

                                 WEBHIRE, INC.
            (Exact name of Registrant as specified in its charter)

                               -----------------

<TABLE>
   <S>                                      <C>
                   Delaware
       (State or other jurisdiction of                 04-2935271
        incorporation or organization)      (IRS Employer Identification No.)

              91 Hartwell Avenue
                Lexington, MA                             02421
   (Address of principal executive offices)            (zip code)
</TABLE>

                                (781) 869-5000
             (Registrant's telephone number, including area code)

   Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or such shorter period that the Registrant
was required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [_]

   Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date:

                              Title of each class

   Common stock, $.01 par value, shares outstanding at February 14, 2002:
4,517,079 shares.

================================================================================

<PAGE>

                                 WEBHIRE, INC.

                                     INDEX

Part I--Financial Information

<TABLE>
<CAPTION>
                                                                                                  Page
                                                                                                  ----
<C>     <S>                                                                                       <C>
Item 1. Consolidated Financial Statements........................................................
        Consolidated Balance Sheets at December 31, 2001 (unaudited) and September 30, 2001......   3
        Consolidated Statements of Operations (unaudited) for the three months ended December 31,
          2001 and December 31, 2000.............................................................   4
        Consolidated Statements of Cash Flows (unaudited) for the three months ended December 31,
          2001 and December 31, 2000.............................................................   5
        Notes to Consolidated Financial Statements (unaudited)...................................   6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations....   9
Item 3. Quantitative and Qualitative Disclosure About Market Risk................................  18
Part II--Other Information
Item 1. Legal Proceedings........................................................................  19
Item 2. Changes in Securities....................................................................  19
Item 3. Defaults upon Senior Securities..........................................................  19
Item 4. Submission of Matters to a Vote of Security Holders......................................  19
Item 5. Other Information........................................................................  19
Item 6. Exhibits and Reports on Form 8-K.........................................................  19
Part III--Signatures.............................................................................  20
</TABLE>


                                      2

<PAGE>

                         PART I--FINANCIAL INFORMATION

Item 1.  Financial Statements

                                 WEBHIRE, INC.

                          CONSOLIDATED BALANCE SHEETS
                     (in thousands, except share amounts)

<TABLE>
<CAPTION>
                                                                                  December 31, September 30,
                                                                                      2001         2001
                                                                                  ------------ -------------
                                                                                  (Unaudited)
<S>                                                                               <C>          <C>
                                     ASSETS
Current assets:
   Cash and cash equivalents.....................................................   $  3,460     $  2,982
   Short-term investments........................................................        357          695
   Restricted cash...............................................................      1,500        1,500
   Accounts and installments receivable, less allowance for doubtful accounts of
     $484 at December 31, 2001 and September 30, 2001, respectively..............      1,237        2,041
   Other current assets..........................................................      1,794        1,822
                                                                                    --------     --------
       Total current assets......................................................      8,348        9,040
                                                                                    --------     --------
Long-term installments receivable, net...........................................         40           63
Property and equipment, net......................................................      1,927        2,518
Acquired technologies, net of accumulated amortization of $19,327 and $18,672 at
  December 31, 2001 and September 30, 2001, respectively.........................      2,489          826
Intangible assets net of accumulated amortization of $4,022 and $3,928 at
  December 31, 2001 and September 30, 2001, respectively.........................      1,323        3,246
Other assets.....................................................................        398          398
                                                                                    --------     --------
       TOTAL ASSETS..............................................................   $ 14,525     $ 16,091
                                                                                    ========     ========
                      LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable..............................................................   $  1,608     $  1,930
   Accrued expenses..............................................................      1,010        1,305
   Notes payable--bank...........................................................      1,500        1,500
   Current portion of capital lease obligations..................................        191          234
   Deferred revenue..............................................................      4,340        4,422
                                                                                    --------     --------
       Total current liabilities.................................................      8,649        9,391
                                                                                    --------     --------
Other liabilities................................................................        145          152
                                                                                    --------     --------
       Total liabilities.........................................................      8,794        9,543
                                                                                    --------     --------
Commitments and contingencies....................................................         --           --
Stockholders' equity:
Preferred stock, $.01 par value--Authorized--5,000,000 shares,
  Issued and outstanding--none at December 31, 2001 and September 30, 2001.......         --           --
Common stock, $.01 par value--Authorized--30,000,000 shares,
  Issued--4,654,459 and 4,648,055 shares at December 31, 2001 and
  September 30, 2001, respectively, Outstanding--4,517,079 and 4,510,675 shares
  at December 31, 2001 and September 30, 2001, respectively......................         46           46
Additional paid-in capital.......................................................     70,208       70,192
Treasury stock, at cost--137,380 shares at December 31, 2001 and September 30,
  2001, respectively.............................................................       (831)        (831)
Accumulated deficit..............................................................    (63,692)     (62,859)
                                                                                    --------     --------
       Total stockholders' equity................................................      5,731        6,548
                                                                                    --------     --------
       TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY................................   $ 14,525     $ 16,091
                                                                                    ========     ========
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                            statements (unaudited)

                                      3

<PAGE>

                                 WEBHIRE, INC.

                     CONSOLIDATED STATEMENTS OF OPERATIONS
              (in thousands, except share and per share amounts)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                                  Three Months Ended
                                                                                     December 31,
                                                                                ----------------------
                                                                                   2001        2000
                                                                                ----------  ----------
<S>                                                                             <C>         <C>
Revenue:
   Services revenue--Internet.................................................. $    2,720  $    3,430
   Services revenue--Enterprise................................................      1,350       2,188
   Product revenue.............................................................         77         646
                                                                                ----------  ----------
       Total revenue...........................................................      4,147       6,264
                                                                                ----------  ----------
Cost of revenue:
   Services revenue--Internet..................................................      1,558       2,844
   Services revenue--Enterprise................................................        335         432
   Product revenue.............................................................         51         215
   Amortization of acquired technologies and capitalized internal-use software
     (relates to services revenue-internet)....................................        687       1,714
                                                                                ----------  ----------
       Total cost of revenue...................................................      2,631       5,205
                                                                                ----------  ----------
Gross profit...................................................................      1,516       1,059
                                                                                ----------  ----------
Operating expenses:
   Research and development....................................................        706       2,456
   Sales and marketing.........................................................        842       2,193
   General and administrative..................................................        913       1,600
   Amortization of intangible assets...........................................         62         545
                                                                                ----------  ----------
       Total operating expenses................................................      2,523       6,794
                                                                                ----------  ----------
Loss from operations...........................................................     (1,007)     (5,735)
                                                                                ----------  ----------
Other (expense) income, net....................................................         (2)        156
                                                                                ----------  ----------
Loss before income taxes.......................................................     (1,009)     (5,579)
Benefit from income taxes......................................................       (176)         --
                                                                                ----------  ----------
Net loss....................................................................... $     (833) $   (5,579)
                                                                                ==========  ==========
Basic and diluted net loss per common share.................................... $     (.18) $    (1.30)
                                                                                ==========  ==========
Basic and diluted weighted average number of common shares outstanding.........  4,517,009   4,292,563
                                                                                ==========  ==========
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                            statements (unaudited)

                                      4

<PAGE>

                                 WEBHIRE, INC.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (in thousands)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                                              Three Months
                                                                                           Ended December 31,
                                                                                           -----------------
                                                                                            2001       2000
                                                                                           ------    -------
<S>                                                                                        <C>       <C>
Cash Flows from Operating Activities:
   Net loss............................................................................... $ (833)   $(5,579)
 Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
   Depreciation and amortization..........................................................  1,276      2,906
   Provision for doubtful accounts........................................................     --        175
   Loss on sale of property and equipment.................................................     15         --
   Changes in assets and liabilities:
       Accounts and installments receivable...............................................    804      1,444
       Other current assets...............................................................     28       (389)
       Long-term installments receivable..................................................     23         22
       Accounts payable...................................................................   (322)       868
       Accrued expenses...................................................................   (295)    (2,010)
       Deferred revenue...................................................................    (82)    (1,465)
       Other liabilities..................................................................     (7)        (4)
                                                                                           ------    -------
          Net cash provided by (used in) operating activities.............................    607     (4,032)
                                                                                           ------    -------
Cash Flows from Investing Activities:
   Purchases of acquired technologies and intangible assets...............................     --     (2,500)
   Additions to capitalized internal-use software.........................................   (489)        --
   Purchases of property and equipment....................................................     --       (519)
   Proceeds from sale of property and equipment...........................................     49         --
   Purchases of short-term investments....................................................     --     (2,668)
   Proceeds from sale and maturities of short-term investments............................    338      3,665
   Proceeds from returns of security deposits.............................................     --         10
                                                                                           ------    -------
          Net cash used in investing activities...........................................   (102)    (2,012)
                                                                                           ------    -------
Cash Flows from Financing Activities:
   Issuance costs in connection with private placement of common stock....................     --        (82)
   Proceeds from employee stock purchase plan stock issuance..............................     16         49
   Payments of capital lease obligations..................................................    (43)        --
                                                                                           ------    -------
          Net cash used in financing activities...........................................    (27)       (33)
                                                                                           ------    -------
Net increase (decrease) in cash and cash equivalents......................................    478     (6,077)
Cash and cash equivalents, beginning of period............................................  2,982     12,135
                                                                                           ------    -------
Cash and cash equivalents, end of period.................................................. $3,460    $ 6,058
                                                                                           ======    =======
Supplemental Disclosure of Cash Flow Information:
   Cash paid during the period for
   Interest............................................................................... $   22    $   143
                                                                                           ------    -------
   Income taxes........................................................................... $    7    $    --
                                                                                           ------    -------
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                            statements (unaudited)

                                      5

<PAGE>

                                 WEBHIRE, INC.

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              (in thousands, except share and per share amounts)
                                  (unaudited)

                               DECEMBER 31, 2001

(1)  Accounting Policies

  (a) Basis of Presentation

   The accompanying consolidated financial statements include the accounts of
Webhire, Inc. and its wholly owned subsidiaries (collectively, "the Company").
All significant intercompany transactions and balances have been eliminated in
consolidation. Certain amounts in the prior period's financial statements have
been reclassified to conform to the current period presentation.

  (b) Preparation of Financial Statements

   As permitted by the rules of the Securities Exchange Commission applicable
to Quarterly Reports on Form 10-Q, these notes are condensed and do not contain
all disclosures required by generally accepted accounting principles.

   The consolidated interim financial statements as of December 31, 2001 and
for the three-month period ended December 31, 2001 are unaudited; however, in
the opinion of management, the interim data includes all adjustments,
consisting only of normal, recurring adjustments, necessary for a fair
statement of the results for the interim period. The results for the interim
period are not necessarily indicative of the results for the entire year. The
consolidated financial statements should be read in conjunction with the
consolidated financial statements of Webhire, Inc. for the year ended September
30, 2001 ("fiscal 2001") included in its Annual Report on Form 10-K, filed with
the Securities and Exchange Commission.

  (c) Short-Term Investments

   The Company classifies its short-term investments as available-for-sale. At
December 31, 2001 and September 30, 2001 the Company had $357 and $695
available-for-sale investments, respectively. Realized and unrealized gains and
losses for the periods presented were not material.

  (d) Recent Accounting Standards

   In October 2001, the Financial Accounting Standards Board (the "FASB")
issued Statement of Financial Accounting Standard (SFAS) No. 144, Accounting
for the Impairment of Disposal of Long-Lived Assets. SFAS No. 144 requires that
those long-lived assets be measured at the lower of carrying amount or fair
value less cost to sell, whether reported in continuing operations or in
discontinued operations. Therefore, discontinued operations will no longer be
measured at net realizable value or include amounts for operating losses that
have not yet occurred. SFAS No. 144 is effective for financial statements
issued for fiscal years beginning after December 15, 2001 and, generally, is to
be applied prospectively. The Company will adopt the provisions of SFAS No. 144
on October 1, 2002, the beginning of fiscal 2003.

   In June 2001, the FASB issued SFAS No. 141, Business Combinations. SFAS No.
141 requires that all business combinations be accounted for under the purchase
method only and that certain acquired intangible assets in a business
combination be recognized as assets apart from goodwill. SFAS No. 141 is
effective for all business combinations initiated after June 30, 2001 and for
all business combinations accounted for by the purchase method for which the
date of acquisition is after June 30, 2001. The adoption of SFAS No. 141 did
not have an impact on the Company's financial results of operations.

                                      6

<PAGE>

                                 WEBHIRE, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENT--(Continued)

   In June 2001, the FASB also issued SFAS No. 142, Goodwill and Other
Intangible Assets. SFAS No. 142 requires, among other things, the cessation of
goodwill amortization. In addition, the standard includes provisions for the
reclassification to goodwill of certain existing intangible assets,
reassessment of the useful lives of existing intangible assets,
reclassification of certain intangible assets out of previously reported
goodwill and the identification of reporting units for purposes of assessing
potential future impairment of goodwill. The Company has adopted SFAS No. 142
effective with the commencement of fiscal year 2002 (see Note 3) and, as
required by SFAS No. 142, has reclassified all unidentifiable intangible assets
on the books as of the beginning of fiscal year 2002 to the various acquired
technologies and other identified intangible assets.

(2)  Net Loss per Share

   For the three-month periods ended December 31, 2001 and 2000, 711,532 and
462,268 potential common shares from assumed exercise of stock options and
warrants, respectively, were excluded from the net loss per share calculation,
as their effect would have been anti-dilutive due to the Company's net loss in
those periods.

(3)  Acquired Technologies and Intangibles

   On December 13, 1999, the Company acquired certain assets of Human Resources
Sites International, Inc. ("HR Sites").The total acquisition consideration
amounted to $8,640 and the purchase price was allocated to the following
identifiable and unidentifiable assets with the following estimated lives:

<TABLE>
<CAPTION>
                                                     Amount Estimated Life
                                                     ------ --------------
      <S>                                            <C>    <C>
      Acquired technology........................... $2,069    3 years
      Non-compete agreements........................    157    3 years
      Customer base.................................     24    5 years
      Property and equipment........................     20     1 year
      Excess purchase price over identifiable assets  6,370    3 years
                                                     ------
                                                     $8,640
                                                     ======
</TABLE>

   Beginning in fiscal 2002, the Company adopted SFAS No. 142 under which the
Company was required to reallocate the excess purchase price over identifiable
assets to the identifiable intangible assets, net of accumulated amortization,
based on their relative fair values as of the date of reallocation. In
accordance with the new pronouncement, the Company also reassessed the useful
life of each intangible asset and evaluated the intangible assets for
impairment. Based upon the forecasted use of the Company's intangible assets
and their short useful lives no impairment of the carrying values was recorded
upon adoption of SFAS No. 142. The following represents the values of acquired
technology and intangible assets acquired from HR Sites as of December 31,
2001, and their remaining estimated useful lives:

<TABLE>
<CAPTION>
                                                  Remaining
                                         Amount Estimated Life
                                         ------ --------------
                  <S>                    <C>    <C>
                  Acquired technology... $2,489    1 years
                  Non-compete agreements    188    1 years
                  Customer base.........     54    3 years
                                         ------
                                         $2,731
                                         ======
</TABLE>

                                      7

<PAGE>

                                 WEBHIRE, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENT--(Continued)



   Had the provisions of SFAS No. 142 been applied to earlier periods, there
would not have been a material change in amortization expense or the net loss
reported for those periods or for the three months ended December 31, 2001.

(4)  Business Segment Information

   The Company has two reportable segments: 1) Internet and transaction-based
solutions and 2) Enterprise software solutions, the former of which began to
emerge in fiscal 1997 with the offering of outsourced services (e.g., resume
scanning, acknowledgement letters). The Internet and transaction-based
solutions segment provides outsourced management of private candidate pools via
Webhire Recruiter, subscription services to public resume pools and job-posting
sites, resume scanning, reference checking and other fee-based staffing
functions. The enterprise software solutions segment provides perpetual
licenses to the Company's software products and the related maintenance,
training, implementation and consulting services in support of such licenses.

   The accounting policies of the segments are the same as those described in
the summary of significant accounting policies in the Company's Annual Report
on Form 10-K. Expenses such as depreciation, rent and utilities are allocated
to the reportable segments based on relative headcount as a basis of relative
usage. The Company has no intersegment sales and transfers, and does not
allocate assets to the operating segments.

   The Company's reportable segments are strategic business units that offer
different solutions tailored to a customer's needs.

<TABLE>
<CAPTION>
                                  Three months ended December 31, 2001:
                                  ------------------------------------
                                  Internet and  Enterprise    Total
                                  Transactions   Software    Company
                                  ------------  ---------- -----------
         <S>                      <C>           <C>        <C>
         Revenue.................  $2,720,000   $1,427,000 $ 4,147,000
         Gross profit............     475,000    1,041,000   1,516,000
         Loss from operations....                           (1,007,000)
         Other income, net.......                               (2,000)
                                                           -----------
         Loss before income taxes                          $(1,009,000)
                                                           ===========
</TABLE>

<TABLE>
<CAPTION>
                                  Three months ended December 31, 2000:
                                  ------------------------------------
                                  Internet and  Enterprise    Total
                                  Transactions   Software    Company
                                  ------------  ---------- -----------
         <S>                      <C>           <C>        <C>
         Revenue................. $ 3,430,000   $2,834,000 $ 6,264,000
         Gross (loss) profit.....  (1,128,000)   2,187,000   1,059,000
         Loss from operations....                           (5,735,000)
                                                           -----------
         Other income, net.......                              156,000
                                                           -----------
         Loss before income taxes                          $(5,579,000)
                                                           ===========
</TABLE>

                                      8

<PAGE>

Item 2.  Management's Discussion and Analysis of Financial Condition and
Results of Operations

                                 WEBHIRE, INC.

                     MANAGEMENT'S DISCUSSION AND ANALYSIS
               OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
              FOR THE THREE-MONTH PERIOD ENDED DECEMBER 31, 2001

   This report contains forward-looking statements that involve risks and
uncertainties. The statements contained in this report that are not purely
historical are forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the Securities and
Exchange Act of 1934, as amended. Forward-looking statements include, without
limitation, statements containing the words "anticipates", "believes",
"expects", "intends", "future", and words of similar import which express
management's belief, expectations or intentions regarding the Company's future
performance. All forward-looking statements included in this report are based
on information available to the Company on the date hereof, and the Company has
no obligation to update any such forward-looking statements. The Company's
actual results could differ materially from its historical operating results
and from those anticipated in these forward-looking statements as a result of
certain factors, including, without limitation, those set forth below under
"Factors Affecting Future Operating Results" and elsewhere in this report.

Consolidated Results of Operations
(in thousands)

  Revenue

   Total revenue for the three-month period ended December 31, 2001 was $4,147
compared with $6,264 for the three-month period ended December 31, 2000.

    Services Revenue.

   Services revenue--Internet decreased 21% to $2,720 for the three months
ended December 31, 2001 from $3,430 for the three months ended December 31,
2000. The decrease reflects the impact of adverse economic conditions on
technology and other growth companies that were early users of the Company's
products.

   Services revenue--Enterprise was $1,350 for the three months ended December
31, 2001 compared with $2,188 for the three months ended December 31, 2000. The
38% decrease is primarily attributable to a reduction in maintenance revenues
as contracts expired relating to product licenses.

   Product Revenue.  Product revenue, which relates to the enterprise software
solutions segment, was $77 for the three months ended December 31, 2001
compared with $646 for the three months ended December 31, 2000. The 88%
decrease is primarily attributable to the Company's transition to the Internet
product line.

  Cost of Revenue

    Cost of Services Revenue.

   Cost of services revenue--Internet decreased 45% to $1,558 for the three
months ended December 31, 2001 from $2,844 for the comparable fiscal 2001
period. The decrease in absolute dollars is principally attributable to a
decrease in services purchased as well as cost efficiencies in resume
processing and hardware hosting. Internet gross margins, excluding amortization
of acquired technologies, improved to 43% for the first quarter of fiscal 2002
from 17% for the comparable fiscal 2001 period.

   Cost of services revenue--Enterprise decreased 22% to $335 for the period
ended December 31, 2001 from $432 for the comparable fiscal 2001 period. The
decrease is due to a reduction in headcount assigned to this product line and a
shift of the Company's resources towards an Internet and transaction-based
solutions segment.

                                      9

<PAGE>

   Cost of Product Revenue.  Cost of product revenue decreased 76% to $51 for
the three months ended December 31, 2001 from $215 for the three months ended
December 31, 2000. The decrease in cost of product revenue is due primarily to
the Company's transition towards an Internet and transaction-based solutions
segment as well as the further decrease in the Company's royalty payments.

   Amortization of Acquired Technologies and Capitalized Internal-Use
Software.  Amortization of acquired technologies and capitalized internal-use
software was $687 and $1,714 for the three months ended December 31, 2001 and
2000, respectively. The decrease between the two periods is primarily
attributed to the Company fully amortizing the assets purchased from Amazon.com
and HireWorks, Inc. during fiscal 2001. This decrease is offset by an increase
in amortization based on the adoption of SFAS No. 142. Under SFAS No. 142 the
Company was required to reallocate the value of unidentifiable intangible
assets purchased from HR Sites to the acquired technologies and other
identifiable intangible assets purchased, based on their relative fair values.
This decrease is also offset by the amortization of internally-developed
internal-use software costs which are being amortized over a five-year
estimated life.

  Operating Expenses

   Research and Development.  Research and development expenses were $706 or
17% of total revenue for the three months ended December 31, 2001 as compared
with $2,456 or 39% of total revenue for the comparable fiscal 2001 period. The
decrease is primarily due to a reduction in headcount and consulting expenses
upon management's decision to halt development on certain products in early
fiscal 2001, as well as ongoing resource management.

   Sales and Marketing.  Sales and marketing expenses were $842 or 20% of total
revenue for the three months ended December 31, 2001 as compared with $2,193 or
35% of total revenue for the comparable fiscal 2001 period. The decrease in
absolute dollars and as a percentage of revenue is primarily due to reduced
spending on marketing and sales programs. The Company expects that sales and
marketing expenses may vary from quarter to quarter as a percentage of total
revenue.

   General and Administrative.  General and administrative expenses were $913
or 22% of total revenue for the three months ended December 31, 2001 as
compared with $1,600 or 26% of total revenue for the comparable three-month
period of fiscal 2001. The decreases for the three-month period of fiscal 2002
as compared with fiscal 2001 is primarily the result of reduced headcount in
the Human Resources, Finance and Accounting and Corporate IT organizations.

   Amortization of Intangible Assets.  Amortization of intangible assets
decreased 89% to $62 for the three months ended December 31, 2001 as compared
with $545 for the three months ended December 31, 2000. The decrease is a
result of the Company adopting SFAS No. 142, Goodwill and Other Intangible
Assets. The $62 for the three months ended December 31, 2001 represents the
accounting under SFAS No. 142, and will remain consistent in future quarters
until all remaining intangible assets are fully amortized.

  Other Income, Net

   Other income, net decreased to an expense of $2 for the three-month period
ended December 31, 2001 from income of $156 for the comparable fiscal 2001
period. Other income consists primarily of interest earned on investments
offset by interest paid on the bank line of credit, and for the period ended
December 31, 2001, a loss of $15 on the sale of excess computer equipment.

  Benefit from Income Taxes

   Benefit from income taxes increased to $176 for the three-month period ended
December 31, 2001 from $0 for the comparable fiscal 2001 period. This increase
is principally the result of a refund received of federal income taxes paid
from a prior period.

                                      10

<PAGE>

Recent Accounting Pronouncements

   In October 2001, the Financial Accounting Standards Board (the "FASB")
issued Statement of Financial Accounting Standard (SFAS) No. 144, Accounting
for the Impairment of Disposal of Long-Lived Assets. SFAS No. 144 requires that
those long-lived assets be measured at the lower of carrying amount or fair
value less cost to sell, whether reported in continuing operations or in
discontinued operations. Therefore, discontinued operations will no longer be
measured at net realizable value or include amounts for operating losses that
have not yet occurred. SFAS No. 144 is effective for financial statements
issued for fiscal years beginning after December 15, 2001 and, generally, is to
be applied prospectively. The Company will adopt the provisions of SFAS No. 144
on October 1, 2002, the beginning of fiscal 2003.

   In June 2001, the FASB issued SFAS No. 141, Business Combinations. SFAS No.
141 requires that all business combinations be accounted for under the purchase
method only and that certain acquired intangible assets in a business
combination be recognized as assets apart from goodwill. SFAS No. 141 is
effective for all business combinations initiated after June 30, 2001 and for
all business combinations accounted for by the purchase method for which the
date of acquisition is after June 30, 2001. The implementation of SFAS No. 141
did not have an impact on the Company's financial results of operations.

   In June 2001, the FASB also issued SFAS No. 142, Goodwill and Other
Intangible Assets. SFAS No. 142 requires, among other things, the cessation of
goodwill amortization. In addition, the standard includes provisions for the
reclassification to goodwill of certain existing intangible assets,
reassessment of the useful lives of existing intangible assets,
reclassification of certain intangible assets out of previously reported
goodwill and the identification of reporting units for purposes of assessing
potential future impairment of goodwill. The Company has adopted SFAS No. 142
effective with the commencement of fiscal year 2002 and has reclassified
unidentifiable intangible assets to the acquired technologies and intangible
assets.

Liquidity and Capital Resources
(in thousands)

   At December 31, 2001, the Company had cash, cash equivalents and short-term
investments of $3,817, an increase of $140 from $3,677 at September 30, 2001.

   Cash provided by operating activities was $607 during the three-month period
ended December 31, 2001. Cash provided by operating activities consisted
primarily of the net loss for the three-month period of $833, offset by the
effects of depreciation and amortization of $1,276.

   The Company used $102 in investing activities during the first quarter of
fiscal 2002, principally for the additions to capitalized internal-use software
of $489 partially offset by the sales and maturities of short-term investments
of $338.

   Net cash used in financing activities for the three-month period ended
December 31, 2001 was $27, which consisted of proceeds from the Company's
employee stock purchase plan offset by payments on its capital lease
obligations.

   The Company has a $3,000 line of credit from Citizens Bank of Massachusetts
("the bank"). The Company is required to maintain deposits with the bank in an
amount at least sufficient to satisfy its obligations under this line of
credit. As of December 31, 2001, $1,500 was pledged under this arrangement and
has been reflected as restricted cash.

   To date, the Company has not invested in derivative securities or any other
financial instruments that involve a high level of complexity or risk. Cash has
been, and the Company contemplates that it will continue to be, invested in
interest-bearing, investment grade securities.

   From time to time, the Company may evaluate potential acquisitions of
products, businesses and technologies that may complement or expand the
Company's business. Any such transactions consummated may use a portion of the
Company's working capital and/or require the issuance of equity or debt.

                                      11

<PAGE>

   The Company believes that its current cash, cash equivalent and short-term
investment balances in conjunction with it's forecast of operating cash flows
will be sufficient to meet its liquidity expenditure requirements through
fiscal 2002.

Factors Affecting Future Operating Results

   An investment in our common stock involves various risks. Before investing
in our common stock, you should carefully consider the following risk factors.
These risk factors are not exhaustive and should be read together with the
other reports and documents that we file with the Securities and Exchange
Commission, which may include additional or more current information that
should be considered in making an investment in us.

  If we are unable to obtain additional capital as needed in the future, our
  business may be adversely affected.

   We currently anticipate that our available cash and cash equivalents will be
sufficient to meet our anticipated working capital and capital expenditure
requirements through the near term. We may need to raise additional capital in
the long term to fund more rapid expansion, to develop new services, to enhance
existing services in response to competitive pressures, and to acquire
complementary services, businesses or technologies. In the event our operations
are not profitable or do not generate sufficient cash to fund the business, or
if we fail to receive money to meet our obligations, we may have to
substantially cut back our level of operations. These reductions could, in
turn, affect our relationships with our strategic partners and customers and
threaten our ability to continue as an ongoing concern. If we raise additional
funds through issuances of equity or convertible debt securities, the
percentage of ownership of our current stockholders will be reduced and such
securities may have rights, preferences and privileges senior to those of our
current stockholders. In addition, we may not be able to obtain such financing
on terms favorable to us, if at all. If adequate funds are not available or are
not available on terms favorable to us, our business, financial condition and
results of operations could be materially and adversely affected.

  To compete effectively, we must adapt quickly to advances in technology and
  changes in customer requirements.

   The market for automated recruiting products and services is undergoing
rapid changes, including continuing advances in technology and changes in
customer requirements and preferences. Our future success will depend in
significant part on our ability to continually improve the performance,
features and reliability of our software and services in response to the
evolving demands of the marketplace and competitive product offerings. Any
failure on our part to quickly develop products and services that address
changes in technology or customer demands will likely result in loss of market
share to a competitor.

  Our business model is not yet fully proven.

   In fiscal 1998 we expanded our technology into products and services that
could be offered over the Internet to foster long-term growth. Since that time,
revenue from Internet-based transactions has grown in relation to revenue from
our software licensing and maintenance business, becoming a majority of our
total revenue for the first time in the first quarter of fiscal 2001. We expect
our reliance on Internet-based transactions for revenues to continue to
increase in the future, and we expect product revenue from software license
sales and maintenance to continue to become a smaller component of our revenue
over time. Our long-term business model and profit potential are not yet fully
proven. To be successful, we must develop and market online recruitment
offerings that achieve broad market acceptance by employers, job seekers and
interactive media companies. It is possible that we will be required to further
adapt our business model in response to additional changes in the online
recruitment market or if our current business model is not successful. If we
are not able to anticipate changes in the online recruitment market or if our
business model is not successful, our business, financial condition and results
of operations will be materially and adversely affected.

                                      12

<PAGE>

  We may be unable to continue to build customer awareness.

   We believe that continuing to build brand recognition is critical to
achieving widespread acceptance of our online recruitment offerings. Brand
recognition is a key differentiating factor among providers of online
recruitment offerings and we believe it could become more important as
competition in the online recruitment market increases. We may find it
necessary to accelerate expenditures on our sales and marketing efforts or
otherwise increase our financial commitment to creating and maintaining brand
awareness among potential customers. If we fail to successfully promote and
maintain our brand or incur significant expenses in promoting our brand, our
business, financial condition and results of operations could be materially and
adversely affected.

  The demand for automated recruiting software and services may fail to grow
  and generate business.

   Our future success substantially depends on broader recognition of the
potential benefits of automated recruiting software and services and the growth
in demand for these products and services. It is difficult to assess the size
of the market that will develop and the rate at which it will develop. If the
market does not develop as we anticipate, or if it develops more slowly than we
expect, our business, financial condition and results of operations will be
materially and adversely affected.

  Our business is dependent on the continued development and maintenance of the
  Internet infrastructure.

   Our success will depend, in large part, upon the continued development and
maintenance of the Internet infrastructure as a reliable network backbone with
the necessary speed, data capacity and security, and timely development of
enabling products, such as high-speed modems, for providing reliable Internet
access and services. We cannot assure you that the Internet infrastructure will
continue to effectively support the demands placed on it as the Internet
continues to experience increased numbers of users, greater frequency of use or
increased bandwidth requirements of users. Even if the necessary infrastructure
or technologies are developed, we may have to spend considerable resources to
adapt our offerings accordingly. Furthermore, in the past, the Internet has
experienced a variety of outages and other delays. Any future outages or delays
could affect the Internet sites on which our customers' job advertisements are
posted and the willingness of employers and job seekers to use our online
recruitment offerings. If any of these events occur, our business, financial
condition and results of operations could be materially and adversely affected.

  Our business is dependent on the continued development of the Internet as a
  recruiting medium.

   Our future is highly dependent on the continuing increase in the use of the
Internet as a recruiting medium. The online recruitment market is rapidly
evolving, and we cannot yet gauge its effectiveness as compared to traditional
recruiting methods. As a result, demand and market acceptance of online
recruitment offerings are uncertain. The adoption of online recruiting,
particularly by those entities that have historically relied upon traditional
methods of recruiting, requires the acceptance of a new way of conducting
business, exchanging information and advertising for jobs. We cannot assure you
that the online recruitment market will continue to emerge or become
sustainable. If the online recruitment market develops more slowly than we
expect, our business, financial condition and results of operations will be
materially and adversely affected.

  Our computer systems could fail or overload.

   The success of our online recruitment offerings depends highly on the
efficient and uninterrupted operation of our computer and communications
systems. Power loss, telecommunications failures, computer viruses, electronic
break-ins or other similar disruptive problems could damage or cause
interruptions in these systems. If our systems are affected by any of these
occurrences, our business, financial condition and results of operations could
be materially and adversely affected. Our insurance policies may not cover, or
if covered, may not adequately compensate us for, any losses that may occur due
to any failures or interruptions in our systems. We currently have a redundant
system capability to deal with a service emergency, but we do not presently
have a formal rollover disaster recovery plan.


                                      13

<PAGE>

   In addition, we must accommodate a high volume of traffic and deliver
frequently updated information. Our web sites have in the past and may in the
future experience slower response times or decreased traffic for a variety of
reasons. In addition, our users depend on Internet service providers and other
Internet site operators for access to our web sites. Many of the Internet
service providers have experienced significant outages in the past, and could
experience outages, delays and other difficulties due to system failures
unrelated to our systems.

   If we experience any of these problems, our business, financial condition
and results of operations could be materially and adversely affected.

  Our new product and service introductions may have defects which could result
  in adverse publicity or have other negative effects.

   As the marketplace for recruiting solutions continues to evolve, we plan to
develop and introduce new products and services to enable us to effectively
meet the changing needs of the market. Products as complex as the ones that we
offer may contain undetected errors when first introduced or when new versions
are released. In the past, despite prior testing, we have discovered software
errors in some of our products after their introduction. Defects in product and
services may result in adverse publicity, loss of or delay in market
acceptance, injury to our reputation and brand awareness, or claims against us,
any one of which could have a material adverse effect on our business,
financial condition and results of operations.

  We have significant competition from a variety of sources.

   The market for recruitment solutions is intensely competitive and highly
fragmented. There are a large number of job boards, search firms, and Internet
portal sites that are vying for a share of companies' corporate recruiting
budgets. We expect to face additional competition as other established and
emerging companies including print media companies and employee recruiting
agencies with established brands, enter the online recruitment market.

   Many of our current and potential competitors have significantly greater
financial, technical, marketing and other resources than we do. In addition,
current and potential competitors may make strategic acquisitions or establish
cooperative relationships to expand their offerings and to offer more
comprehensive solutions.

   We believe that there will be rapid business consolidation in the online
recruitment industry. Accordingly, new competitors may emerge and rapidly
acquire significant market share. In addition, new technologies will likely
increase the competitive pressures that we face. The development of competing
technologies by market participants or the emergence of new industry standards
may adversely affect our competitive position. An increase in competition could
result in price reductions, limitations of access to key content on the
Internet, render our existing software and services obsolete or unmarketable
and/or result in loss of market share.

  The successful operation of our business depends in large part on our
  relationships with third parties.

   A key element of our business strategy is to develop relationships with
leading industry organizations in order to increase our market presence, expand
distribution channels and broaden our product line. We believe that our
continued success depends in large part on our ability to maintain such
relationships and cultivate additional relationships. There can be no assurance
that our existing strategic partners will not discontinue their relationships
with us, or that we will be able to successfully develop additional strategic
relationships.

   In addition, certain technology incorporated in our software is licensed
from third parties on a nonexclusive basis. The termination of any of these
licenses, or the failure of the third-party licensors to adequately maintain or
update their products, could result in a delay in our ability to ship certain
of our products while we seek to implement technology offered by alternative
sources. In addition, any required replacement licenses could prove more costly
than our current license relationships and might not provide technology as
powerful and functional

                                      14

<PAGE>

as the third-party technology we currently license. Also, any such delay, to
the extent it becomes extended or occurs at or near the end of a fiscal
quarter, could have a material adverse effect on our results of operations for
that quarter. While it may be necessary or desirable in the future to obtain
other licenses relating to one or more of our products or relating to current
or future technologies, we may not be able to do so on commercially reasonable
terms or at all.

  Our operating results may be subject to significant quarterly fluctuations.

   Our results of operations have been, and may in the future be, subject to
significant quarterly fluctuations. Such fluctuations could be due to a variety
of factors, including the following:

  .  the introduction of new products by us or our competitors;

  .  the spending patterns of our customers;

  .  our sales incentive strategy which is based in part on annual sales
     targets;

  .  the fact that a substantial portion of our revenue often occurs during the
     last few weeks of each quarter and, as a result, any delays in orders are
     more likely to result in revenue not being recognized until the following
     quarter; and

  .  our current expense levels are based in part on our expectations of future
     revenue and, as a result, net income for a given period could be
     disproportionately affected by any reduction in revenue.

   To the extent our level of revenue in the future decreases from past levels
or in some future quarter our revenue or operating results are below the
expectations of stock market securities analysts and investors, our
profitability and the price of our common stock is likely to be materially and
adversely affected.

  Our business may continue to experience negative effects from a slowdown in
  the U.S. and/or global economies.

   Over the past year the U.S. economy has experienced a significant slowdown.
As a result of this decline, our business was adversely affected. A
continuation of this economic trend could have a material adverse effect on our
business, financial condition, results of operations or prospects.

  Affiliates of SOFTBANK Corp. beneficially own approximately 34% of our
  outstanding stock, are represented on our Board of Directors and have rights
  to participate in certain of our transactions. SOFTBANK's interests could
  conflict with other stockholders' interests and significant sales of stock
  held by it could have a negative effect on our stock price.

   Affiliates of SOFTBANK Corp. currently beneficially own approximately 34% of
our outstanding common stock. As a result of their stock ownership, SOFTBANK
and its affiliates have significant control over all matters requiring
stockholder approval, including the election of directors and approval of
significant corporate transactions, and their interests could conflict with
those of other stockholders. Such concentration of ownership may also have the
effect of delaying or preventing a change in control of our Company. In
addition, sales of significant amounts of shares held by these entities, or the
prospect of these sales, could adversely affect the market price of our common
stock.

   SOFTBANK has the right to nominate two members of our Board of Directors,
which currently consists of six members (one of whom is a SOFTBANK
representative), and for so long as SOFTBANK or its affiliates continues to
hold at least 10% of our outstanding common stock, it is entitled to nominate
one director each time a class of directors in which one of its representatives
serves is subject to election. Further, one of SOFTBANK's directors is entitled
to serve as a member of the audit committee and compensation committee of the
Board of Directors. As a result, SOFTBANK has significant influence on all
matters requiring the approval of the Board of Directors.

                                      15

<PAGE>

   In addition, in the event we propose to enter into a joint venture for
operations in the United Kingdom, continental Europe or Japan or a business
transaction with any competitor of SOFTBANK's affiliate ZDNet, we are required
by the terms of the stock purchase agreement pursuant to which SOFTBANK
acquired our common stock to offer SOFTBANK or one of its affiliates the
opportunity to participate in the transaction on terms and conditions mutually
acceptable to us and them. As a result of these contractual obligations, third
parties may be reluctant to negotiate joint ventures or business transactions
with us because they know SOFTBANK and its affiliates will be given the
opportunity to participate in such transactions.

  Korn/Ferry beneficially owns approximately 15% of our outstanding stock, is
  represented on our Board of Directors and has rights with respect to certain
  of our transactions. Korn/Ferry's interests could conflict with other
  stockholders' interests and significant sales of stock held by it could have
  a negative effect on our stock price.

   Korn/Ferry International currently beneficially owns approximately 15% of
our outstanding common stock. As a result of its stock ownership, Korn/Ferry
has significant control over all matters requiring stockholder approval,
including the election of directors and approval of significant corporate
transactions, and its interests could conflict with those of our other
stockholders. In addition, under the terms of the stock purchase agreement
pursuant to which Korn/Ferry acquired our common stock, for so long as Korn
Ferry continues to hold at least 5% of our common stock, we are required to
first negotiate with Korn/Ferry in the event of a potential sale or acquisition
of our Company or a substantial stock issuance by us. Such concentration of
ownership and such contractual obligation may also have the effect of delaying
or preventing a change in control of our Company. In addition, sales of
significant amounts of shares held by Korn/Ferry, or the prospect of these
sales, could adversely affect the market price of our common stock.

   Korn/Ferry has the right to nominate one member of our Board of Directors,
which currently consists of six members (one of whom is a Korn/Ferry
representative), and for so long as Korn/Ferry continues to hold at least 5% of
our outstanding common stock, it is entitled to nominate one director each time
the class of directors in which its representative serves is subject to
election. As a result, Korn/Ferry has significant influence on all matters
requiring the approval of the Board of Directors.

  We depend on key personnel who may not continue to work for us.

   Our future success depends to a significant extent on our senior management
and other key employees, many of whom have acquired specialized knowledge and
skills with respect to our operations. As a result, if any of these individuals
were to leave our Company, we could face substantial difficulty in hiring
qualified successors and could experience a loss of productivity while any such
successor obtains the necessary training and experience. We also believe that
our future success will depend in large part on our ability to attract and
retain additional key employees. Competition for qualified personnel in the
high tech industry is intense. If we do not succeed in attracting new
personnel, or retaining and motivating existing personnel, our business will be
adversely affected.

  Our stock price may experience extreme price and volume fluctuations and our
  stockholders may not be able to resell their shares at or above their
  purchase price.

   We cannot predict the extent to which investors' interest in us will lead to
a stable trading market or how liquid the market might become. The stock market
in general and the market prices of shares in technology companies,
particularly those such as ours that offer Internet-based products and
services, have been extremely volatile and have experienced fluctuations that
have often been unrelated or disproportionate to the operating performance of
such companies. The market price of our common stock could be highly volatile
and subject to wide fluctuations in response to many factors, including the
following:

  .  quarterly variations in our results of operations;

  .  adverse business developments that have an impact on our business;

                                      16

<PAGE>

  .  changes in financial estimates by securities analysts;

  .  investor perception of our Company and online recruitment services in
     general;

  .  announcements by our competitors of new products and services; and

  .  fluctuations in our common stock price, which may affect our visibility
     and credibility in the online recruitment market.

   In the event of broad fluctuations in the market price of our common stock,
purchasers of our common stock may be unable to resell their shares at or above
their purchase price.

  It is difficult to protect our intellectual property rights.

   We regard our intellectual property rights as critical to our success and
rely on a combination of copyright and trade secret laws, employee and
third-party non-disclosure agreements and other methods to protect these
rights. We cannot be assured that the measures we have taken to protect our
proprietary rights will be adequate to prevent misappropriation of our
technology or independent development by others of similar technology. Our
inability to protect our proprietary rights would have a material adverse
effect on our business, results of operations and financial condition.

  We may be subject to costly intellectual property infringement claims.

   As the number of products and services in our industry increases and as
recruiting solutions further overlap, the likelihood that our current or future
products may become subject to intellectual property infringement claims
increases. Although we are not currently the subject of any intellectual
property litigation, there has been substantial litigation in our industry
regarding copyright, patent and other intellectual property rights involving
computer software companies. Any claims or litigation, with or without merit,
could be costly and could divert management's attention, which could have a
material adverse effect on our business, financial condition and results of
operations. Adverse determinations in such claims or litigation may require us
to obtain a license and/or pay damages, which could also have a material
adverse effect on our business, financial condition and results of operations.

  We may be subject to product liability claims.

   Although we have not experienced any product and service liability claims to
date, the sale and support of our products and the incorporation of products
from other companies may entail the risk of product liability claims. Our
license agreements with our customers typically contain provisions intended to
limit our exposure to such claims. There can be no guarantee, however, that
such provisions will be effective in limiting our exposure. A successful
product liability action brought against us could adversely affect our
business, financial condition and results of operations.

  Anti-takeover provisions could make it more difficult for a third party to
  acquire us.

   Our Board of Directors has the authority to issue up to 5,000,000 shares of
preferred stock and to determine the price, rights, preferences, privileges and
restrictions, including voting rights, of those shares without any further vote
or action by the stockholders. The rights of the holders of common stock may be
subject to, and may be adversely affected by, the rights of the holders of any
preferred stock that may be issued in the future. The issuance of preferred
stock may have the effect of delaying, deferring or preventing a change of
control of the Company without further action by the stockholders and may
adversely affect the voting and other rights of the holders of common stock. We
have no present plans to issue shares of preferred stock. Further, certain
provisions of our charter documents, including provisions providing for a
staggered board of directors and limiting the ability of stockholders to raise
matters at a meeting of stockholders without giving advance notice, may have
the effect of delaying or preventing changes in control or management of the
Company, which could have an adverse effect on the market price of our common
stock.

                                      17

<PAGE>

Item 3.  Quantitative and Qualitative Disclosure About Market Risk

   There have been no significant changes in the Company's market risks since
the year ended September 30, 2001. For more information please read the
consolidated financial statements and notes thereto included in the Company's
Annual Report on Form 10-K for the year ended September 30, 2001.

                                      18

<PAGE>

                                 WEBHIRE, INC.

                          PART II--OTHER INFORMATION:

Item 1.  Legal Proceedings

   The Company is not involved in any pending legal proceedings other than
those arising in the ordinary course of the Company's business. Management
believes that the resolution of these matters will not materially affect the
Company's business or the financial condition of the Company.

Item 2.  Changes in Securities and Use or Proceeds

   None

Item 3.  Defaults upon Senior Securities

   None

Item 4.  Submission of Matters to a Vote of Security Holders

   None

Item 5.  Other Information

   None

Item 6.  Exhibits and Reports on Form 8-K

Exhibit No.    Description
-----------    -----------

   (a) None

   (b) No reports on Form 8-K were filed by the Company during the quarter
ended December 31, 2001.

                                      19

<PAGE>

                                 WEBHIRE, INC.

                             PART III--SIGNATURES

   Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.


                                               WEBHIRE, INC.


                                               By:     /s/  MARTIN J. FAHEY
                                                   -----------------------------
                                                          Martin J. Fahey
                                                      Chief Executive Officer


                                               By:    /s/  STEPHEN D. ALLISON
                                                   -----------------------------
                                                        Stephen D. Allison
                                                      Chief Financial Officer

   Date: February 14, 2002

                                      20