<PAGE>

                         SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, D. C.  20549


                                     FORM 10-Q

         QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                               EXCHANGE ACT OF 1934.

                   For the quarterly period ended APRIL 18, 1998

                           Commission file number 0-24990


                            WESTERN STAFF SERVICES, INC.
               (Exact name of registrant as specified in its charter)

                DELAWARE                             94-1266151
   (State or other jurisdiction                   (I.R.S.employer
of incorporation or organization)              identification number)


                                  301 LENNON LANE
                        WALNUT CREEK, CALIFORNIA  94598-2453
                                  (925)  930-5300
                (Address, including zip code, and telephone number,
         including area code, of registrant's principal executive offices)



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 for 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:

                    Class                        Outstanding at June 1, 1998
                --------------                   ---------------------------

          Common Stock, $.01 par value                 15,507,518 shares

<PAGE>

                   WESTERN STAFF SERVICES, INC. AND SUBSIDIARIES

                                       INDEX


                                                                           PAGE
                                                                           ----

PART I.  FINANCIAL INFORMATION

Item 1.   Financial Statements

          Condensed Consolidated Balance Sheets -
               April 18, 1998 and November 1, 1997                          3

          Condensed Consolidated Statements of Operations -
               12 and 24 weeks ended April 18, 1998 and April 19, 1997      4

          Condensed Consolidated Statements of Cash Flows -
               24 weeks ended April 18, 1998 and April 19, 1997             5

          Notes to Condensed Consolidated Financial Statements              6

Item 2.   Management's Discussion and Analysis of Financial Condition
          and Results of Operations                                        9

PART II. OTHER INFORMATION

Item 1.   Legal Proceedings                                                18

Item 2.   Changes in Securities                                            18

Item 3.   Defaults upon Senior Securities                                  18

Item 4.   Submission of Matters to a Vote of Security Holders              18

Item 5.   Other Information                                                19

Item 6.   Exhibits and Reports on Form 8-K                                 19

Signatures                                                                 20

<PAGE>

PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

WESTERN STAFF SERVICES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                                                                                     APRIL 18,         NOVEMBER 1,
                                                                                                       1998               1997
                                                                                                -----------------  -----------------
                                                                                                    (UNAUDITED)

ASSETS

<S>                                                                                             <C>                <C>
Current assets:
   Cash and cash equivalents                                                                    $           3,755  $           4,796
   Trade accounts receivable, less allowance for doubtful
      accounts of $928 and $879                                                                            91,487             96,502
   Due from licensees                                                                                       7,676              6,825
   Deferred income taxes                                                                                    2,918              2,511
   Other current assets                                                                                     3,958              3,421
                                                                                                -----------------  -----------------
      Total current assets                                                                                109,794            114,055

Property, plant and equipment, net                                                                         19,115             19,583
Deferred income taxes                                                                                       1,620                143
Intangible assets, net                                                                                     24,227             19,181
Other assets                                                                                                2,252              1,568
                                                                                                -----------------  -----------------
                                                                                                $         157,008  $         154,530
                                                                                                -----------------  -----------------
                                                                                                -----------------  -----------------


LIABILITIES AND STOCKHOLDERS' EQUITY


Current liabilities:
   Short-term borrowings                                                                        $                  $        19,700
   Current portion of loans payable                                                                         3,850              625
   Current portion of note payable to related party                                                           972              973
   Accounts payable and accrued expenses                                                                   40,844           42,787
   Income taxes payable                                                                                       833            4,786
                                                                                                -----------------  ---------------
      Total current liabilities                                                                            46,499           68,871

Loans payable                                                                                              37,417           16,659
Note payable to related party                                                                                                  972
Deferred income taxes                                                                                                          494
Other long-term liabilities                                                                                10,288           10,238
                                                                                                -----------------  ---------------
      Total liabilities                                                                                    94,204           97,234
                                                                                                -----------------  ---------------

Commitments and contingencies
Stockholders' equity:
    Preferred stock, $.01 par value; authorized and unissued:  1,000 shares
    Common stock, $.01 par value; authorized:  25,000 shares; issued:
        15,510 shares at April 18, 1998 and 15,507 at November 1, 1997                                        103              103
   Additional paid-in-capital                                                                              29,378           29,073
   Retained earnings                                                                                       33,930           28,994
   Cumulative currency translation                                                                           (574)             (89)
                                                                                                -----------------  ---------------
                                                                                                           62,837           58,081

    Less treasury stock at cost, 3 shares at April 18, 1998 and  114 shares
        at November 1, 1997                                                                                    33              785
                                                                                                -----------------  ---------------
      Total stockholders' equity                                                                           62,804           57,296
                                                                                                -----------------  ---------------
                                                                                                $         157,008  $       154,530
                                                                                                -----------------  ---------------
                                                                                                -----------------  ---------------

</TABLE>

    See accompanying notes to condensed consolidated financial statements.


                                          3
<PAGE>

WESTERN STAFF SERVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                                              12 WEEKS ENDED              24 WEEKS ENDED
                                                       ---------------------     -------------------------
                                                         APRIL 18,      APRIL 19,     APRIL 18,      APRIL 19,
                                                           1998           1997           1998           1997
                                                       ----------     ----------     ----------     ----------
<S>                                                    <C>            <C>            <C>            <C>
Sales of services                                      $  142,028     $  122,486     $  282,730     $  241,132
License fees                                                  537            480            990            799
                                                       ----------     ----------     ----------     ----------

Total sales of services and license fees                  142,565        122,966        283,720        241,931

Costs of services                                         110,502         97,187        220,580        191,938
                                                       ----------     ----------     ----------     ----------

Gross profit                                               32,063         25,779         63,140         49,993

Franchise agents' share of gross profit                     4,616          4,495          9,660          8,981
Selling and administrative expenses                        20,758         17,429         40,913         33,901
Depreciation and amortization                               1,612          1,349          3,173          2,584
                                                       ----------     ----------     ----------     ----------

Operating income                                            5,077          2,506          9,394          4,527

Interest expense                                              661            333          1,335            611
Interest income                                               (84)           (64)          (167)          (218)
                                                       ----------     ----------     ----------     ----------

Income before income taxes                                  4,500          2,237          8,226          4,134
Provision for income taxes                                  1,800            895          3,290          1,654
                                                       ----------     ----------     ----------     ----------

Net income                                             $    2,700     $    1,342     $    4,936     $    2,480
                                                       ----------     ----------     ----------     ----------
                                                       ----------     ----------     ----------     ----------

Basic earnings per share                               $     0.17     $     0.09     $     0.32     $     0.16
                                                       ----------     ----------     ----------     ----------
                                                       ----------     ----------     ----------     ----------

Diluted earnings per share                             $     0.17     $     0.09     $     0.32     $     0.16
                                                       ----------     ----------     ----------     ----------
                                                       ----------     ----------     ----------     ----------


</TABLE>
    See accompanying notes to condensed consolidated financial statements.


                                          4
<PAGE>

WESTERN STAFF SERVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(AMOUNTS IN THOUSANDS)
--------------------------------------------------------------------------------


<TABLE>
<CAPTION>

                                                                              24 WEEKS ENDED
                                                                 -------------------------------------
                                                                    APRIL 18,               APRIL 19,
                                                                       1998                   1997
                                                                 -----------               -----------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                              <C>                       <C>
   Net income                                                    $    4,936                $    2,480
   Adjustments to reconcile net income to net cash
      from operating activities:
         Depreciation                                                 2,368                     2,002
         Amortization of intangible assets                              805                       582
         Provision for losses on doubtful accounts                      465                       610
         Other non-cash charges                                         153
         Deferred income taxes                                       (2,379)                   (1,808)
         Changes in assets and liabilities:
           Trade accounts receivable                                  4,168                     4,628
           Due from licensees                                          (851)                   (1,241)
           Other assets                                                (861)                      (79)
           Accounts payable and accrued expenses                     (1,732)                   (1,638)
           Income taxes payable                                      (3,939)                   (1,537)
           Other long-term liabilities                                   50                        70

Net cash from operating activities                                    3,183                     4,069

CASH FLOWS FROM INVESTING ACTIVITIES

  Expenditures for purchases of fixed assets                         (1,986)                   (2,990)
  Payments for intangibles and other investments                     (5,562)                   (1,798)
  Other, net                                                           (385)                       (1)
                                                                 -----------               -----------

Net cash from investing activities                                   (7,933)                   (4,789)
                                                                 -----------               -----------

CASH FLOWS FROM FINANCING ACTIVITIES

  Net borrowings under line of credit
    agreements                                                        1,200                     6,400
  Principal payments on loans payable                                (1,239)                   (2,037)
  Proceeds from issuance of loans payable                             2,900                     1,400
  Issuance of common stock under stock option/purchase plans          1,247                        87
  Repurchase of common stock                                           (343)                     (966)
  Distributions to stockholders                                                                (2,500)

Net cash from financing activities                                    3,765                     2,384
                                                                 -----------               -----------
Effect of exchange rate on cash                                         (56)                      (69)
                                                                 -----------               -----------

Net change in cash and cash equivalents                              (1,041)                    1,595
Cash and cash equivalents at beginning of period                      4,796                     2,849
                                                                 -----------               -----------


Cash and cash equivalents at end of period                       $    3,755                $    4,444
                                                                 -----------               -----------
                                                                 -----------               -----------

</TABLE>
    See accompanying notes to condensed consolidated financial statements.


                                          5
<PAGE>

WESTERN STAFF SERVICES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
--------------------------------------------------------------------------------

1.   BASIS OF PRESENTATION

     The accompanying condensed consolidated financial statements of Western
     Staff Services, Inc. and its domestic and foreign subsidiaries (together,
     the Company), as of and for the 12 and 24 week periods ended April 18, 1998
     and April 19, 1997 are unaudited. Material intercompany accounts and
     transactions have been eliminated.

     The condensed consolidated financial statements, in the opinion of
     management, reflect all adjustments, which are of a normal recurring
     nature, necessary for a fair presentation of the financial position,
     results of operations and cash flows for the periods presented.

     Certain financial information which is normally included in financial
     statements prepared in accordance with generally accepted accounting
     principles, but which is not required for interim reporting purposes, has
     been condensed or omitted.  The accompanying condensed consolidated
     financial statements should be read in conjunction with the financial
     statements and notes thereto included in the Company's Annual Report on
     Form 10-K for the fiscal year ended November 1, 1997.

     The Company's fiscal year is a fifty-two or fifty-three week period ending
     the Saturday nearest the end of October.  For interim reporting purposes,
     the first three fiscal quarters comprise twelve weeks each while the fourth
     fiscal quarter consists of sixteen or seventeen weeks.  The results of
     operations for the 12 and 24 week periods ended April 18, 1998 are not
     necessarily indicative of the results to be expected for the full fiscal
     year or for any future period.

     Certain amounts in the April 19, 1997 financial statements have been
     reclassified to conform to the presentation adopted for April 18, 1998.

2.   EARNINGS PER SHARE

     The following table sets forth the computation of basic and diluted
     earnings per share:


                                          6
<PAGE>

WESTERN STAFF SERVICES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                                             12 WEEKS ENDED                24 WEEKS ENDED
                                                        ------------------------      ------------------------
                                                        APRIL 18,      APRIL 19,      APRIL 18,      APRIL 19,
                                                          1998           1997           1998           1997
                                                        ---------      ---------      ---------      ---------
<S>                                                    <C>             <C>            <C>            <C>
Net income                                              $   2,700      $   1,342      $   4,936      $   2,480
                                                        ---------      ---------      ---------      ---------

Denominator for basic earnings per share -
    weighted average shares                                15,478         15,423         15,433         15,466

Effect of dilutive securities:
    Stock options                                             225              0            176              1
                                                        ---------      ---------      ---------      ---------
Denominator for diluted earnings per share - adjusted
    weighted average shares and assumed conversions        15,703         15,423         15,609         15,467
                                                        ---------      ---------      ---------      ---------
                                                        ---------      ---------      ---------      ---------

Basic earnings per share                                $    0.17      $    0.09      $    0.32      $    0.16
                                                        ---------      ---------      ---------      ---------
                                                        ---------      ---------      ---------      ---------
Diluted earnings per share                              $    0.17      $    0.09      $    0.32      $    0.16
                                                        ---------      ---------      ---------      ---------
                                                        ---------      ---------      ---------      ---------
Anti-dilutive weighted shares excluded from diluted
    earnings per share                                          2            635              1            616
                                                        ---------      ---------      ---------      ---------
                                                        ---------      ---------      ---------      ---------

</TABLE>


     On May 7, 1998, the Board of Directors declared a three-for-two common
     stock split effected in the form of a stock dividend payable on May 29,
     1998 to shareholders of record at the close of business on May 18, 1998.
     All share and per share data in the condensed consolidated financial
     statements have been retroactively adjusted for the stock split.

     Anti-dilutive weighted shares represent options to purchase shares of
     common stock which were outstanding but were not included in the
     computation of diluted earnings per share because the options' exercise
     price was greater than the average market price of the common shares during
     the period, and therefore the effect would be antidilutive.

3.  FINANCING ARRANGEMENTS

     The Company's senior secured credit facilities totaling $108.0 million
     consist of a $90.0 million, five-year revolving agreement and an $18.0
     million six-year term loan to provide working capital needs and for general
     corporate purposes, including capital expenditures and acquisitions.
     Direct advances under the revolving agreement are limited by outstanding
     irrevocable standby letters of credit up to a maximum amount of $20.0
     million.  As of April 18, 1998, the Company had $10.0 million in
     outstanding letters of credit and had borrowed $20.9 million under the
     revolving agreement.  The borrowings under the revolving agreement have
     been classified as long-term debt in the April 18, 1998 Condensed
     Consolidated Balance Sheet due to the Company's intent and ability to
     refinance these borrowings on a long-term basis.


                                          7
<PAGE>

WESTERN STAFF SERVICES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
--------------------------------------------------------------------------------


     On May 20, 1998, the Company executed private placements of 10-year senior
     secured notes totaling $30.0 million payable in equal annual installments
     beginning in the year 2002.  Proceeds from the notes were used to repay
     outstanding borrowings under the revolving agreement of $22.6 million, with
     the remainder to be used for working capital and general corporate
     purposes.

4.  COMMITMENTS AND CONTINGENCIES

     The Company is subject to claims and other actions arising in the ordinary
     course of business.  Some of these claims and actions have resulted in
     lawsuits in which the Company is a defendant.  Management believes that the
     ultimate obligations, if any, which may result from unfavorable outcomes of
     such lawsuits will not have a material adverse effect on the business,
     financial position, results of operations or cash flows of the Company and
     that such obligations, if any, would be adequately covered by insurance.

5.  SUBSEQUENT EVENTS

     On May 7, 1998, the Board of Directors declared a three-for-two common
     stock split effected in the form of a stock dividend payable on May 29,
     1998 to shareholders of record at the close of business on May 18, 1998.

     On June 2, 1998, the Company filed a Form S-4 shelf registration statement
     with the Securities and Exchange Commission to register 1,500,000
     (post-split) shares of its $.01 par value Common Stock  which may be
     offered in the future in connection with the Company's ongoing acquisition
     program. As of June 2, 1998, the Company has not entered into any
     definitive agreements with respect to any acquisition involving the
     issuance of common stock.


                                          8
<PAGE>

WESTERN STAFF SERVICES, INC.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS
--------------------------------------------------------------------------------

The following discussion is intended to assist in the understanding and
assessment of significant changes and trends related to the results of
operations and financial condition of Western Staff Services, Inc., together
with its consolidated subsidiaries.  This discussion and analysis should be read
in conjunction with the Company's Condensed Consolidated Financial Statements
and Notes thereto included herein and with the Consolidated Financial Statements
and Notes thereto included in the Company's Annual Report on Form 10-K for the
fiscal year ended November 1, 1997.

In addition to historical information, management's discussion and analysis
includes certain forward-looking statements regarding events and financial
trends which may affect the Company's future operating results and financial
position.  These forward-looking statements include, but are not limited to,
statements regarding gross margins, workers' compensation costs, selling and
administrative expenses, interest expense, income taxes, capital expenditures,
capital resources, management information systems, Year 2000 issues and medical
operations.  Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof.  The Company
undertakes no obligation to publicly release the result of any revisions to
these forward-looking statements to reflect events or circumstances after the
date hereof or to reflect the occurrence of unanticipated events.

The forward-looking statements included herein are also subject to a number of
other risks and uncertainties that could cause the Company's actual results and
financial position to differ materially from those anticipated in the
forward-looking statements.  Such risks and uncertainties include, but are not
limited to:  demand for the Company's services, the competition within its
markets, the loss of a principal customer and the Company's ability to increase
the productivity of its existing offices, to control costs, to expand operations
and the availability of sufficient personnel.  Due to the foregoing factors, it
is possible that in some future period the Company's results of operations may
be below the expectations of public market analysts and investors.  In
addition, the Company's results of operations have historically been subject to
quarterly and seasonal fluctuations, with demand for temporary staffing
historically highest in the fourth fiscal quarter, due largely to the planning
cycles of many of the Company's customers, and typically lower in the first
fiscal quarter, due, in part, to national holidays as well as to plant shutdowns
during and after the holiday season.  These and other risks and uncertainties
related to the Company's business are described in detail in the "Business"
section of the Company's Annual Report on Form 10-K for the fiscal year ended
November 1, 1997.

OVERVIEW
The Company provides traditional temporary staffing services to businesses,
government agencies and health care organizations in regional and local markets
in the United States and selected international markets.  The Company was
founded in 1948 with an office in San Francisco, gradually expanding to over 400
offices in the United States, the United Kingdom, Australia, New Zealand,
Denmark and Norway.  Beginning in the late 1950s, the Company began its
franchise agent program and in fiscal 1993 introduced its licensing program.


                                          9
<PAGE>


WESTERN STAFF SERVICES, INC.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS
--------------------------------------------------------------------------------

The general level of economic activity significantly affects the demand for
temporary personnel.  As economic activity has slowed, the use of temporary
employees often has been curtailed before permanent employees have been
released.  In addition, an economic downturn may adversely affect the demand for
temporary personnel and may have a material adverse effect on the Company's
business, results of operations, cash flows and financial condition.  As
economic activity has increased, temporary employees often have been added to
the work force before permanent employees have been hired.  During these periods
of increased economic activity and generally higher levels of employment, the
competition among temporary staffing firms for qualified temporary personnel is
intense.  Further, the Company may face increased competitive pricing pressures
during such periods.  There can be no assurance that during these periods the
Company will be able to recruit the temporary personnel necessary to fill its
customers' job orders or that such pricing pressures will not adversely affect
the Company's business, results of operations, cash flows and financial
condition.

RESULTS OF OPERATIONS

FISCAL QUARTER ENDED APRIL 18, 1998 COMPARED TO FISCAL QUARTER ENDED APRIL 19,
1997

SALES OF SERVICES AND LICENSE FEES.  Sales of services increased $19.5 million
or 16.0% for the fiscal quarter ended April 18, 1998 as compared to the fiscal
quarter ended April 19, 1997.  The increase resulted from a 9.4% increase in
billed hours and a 5.0% increase in average billing rates per hour.   Billed
hours increased primarily due to increased demand in the Company's existing
offices, acquisitions and new office openings.  Same store sales (excluding the
effect of foreign currency rate fluctuations) increased approximately 11.0% for
the second quarter of fiscal 1998 as compared to the second quarter of fiscal
1997.  Acquisitions accounted for approximately $7.7 million of the increase in
sales for the second quarter of fiscal 1998 as compared to the second quarter of
fiscal 1997.  Sales of services for the second quarter of fiscal 1998 increased
14.6%, 2.8% and 53.5%, respectively, for the Company's domestic business
services, international business services and medical services, as compared to
the second quarter of fiscal 1997.  Excluding the effect of foreign currency
rate fluctuations, sales of services increased 12.7% for international business
services. The increase in average billing rates reflects inflationary factors,
the ongoing effects of the Company's gross profit improvement program and
changes in the Company's overall business mix.

License fees are charged to licensed offices based either on a percentage of
sales or of gross profit generated by the licensed offices.  License fees
increased $57,000 or 11.9% for the fiscal quarter ended April 18, 1998 as
compared to the fiscal quarter ended April 19, 1997. During the period from
April 20, 1997 to April 18, 1998, six franchise agents converted to the
license program and two licensees purchased the Company's interest in their
licenses and became independent such that they are no longer affiliated with the
Company.

COSTS OF SERVICES.  Costs of services include hourly wages of temporary
employees, employer payroll taxes, state unemployment and workers' compensation
insurance and other employee-


                                          10
<PAGE>

WESTERN STAFF SERVICES, INC.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS
--------------------------------------------------------------------------------

related costs.  Costs of services increased $13.3 million or 13.7% for the
fiscal quarter ended April 18, 1998 as compared to the fiscal quarter ended
April 19, 1997.  Gross margin increased from 21.0% in the second quarter of
fiscal 1997 to 22.5% in the second quarter of fiscal 1998, primarily due to the
Company's gross profit improvement program implemented during the first quarter
of fiscal 1997, higher relative sales for medical services (which typically
generate higher gross margins), and lower unemployment insurance costs as a
percentage of sales of services and license fees.   During the first quarter of
fiscal 1997 the Company began implementing a nationwide program directed toward
maximizing gross margins by increasing prices on a national basis to select
customers and targeting higher margin business.  As a result of this program,
the Company generated progressively higher gross margins throughout fiscal 1997
increasing gross margins from 20.4% in the first quarter of fiscal 1997 to
21.0%, 21.3%, and 22.1%, respectively, for the second, third and fourth quarters
of fiscal 1997.  Gross margins dropped slightly to 22.0% for the first quarter
of fiscal 1998 as compared to the fourth quarter of fiscal 1997 due to increased
holiday pay and seasonal factors, however, margins once again increased to 22.5%
during the second quarter of fiscal 1998.  The Company will continue with its
efforts to improve gross margins where feasible;  however, there can be no
assurance that the Company will be successful in either increasing gross margins
or eliminating any decreases in gross margins.

Workers' compensation costs were 3.5% of payroll for the fiscal quarter ended
April 18, 1998 and 3.6% for the fiscal quarter ended April 19, 1997.   The
Company currently estimates that the overall costs for workers' compensation as
a percentage of direct labor will be generally consistent for fiscal 1998 as
compared to fiscal 1997.  The costs may vary depending upon the mix of business
between clerical, light industrial and medical.  However, there can be no
assurance that the Company's programs to control workers' compensation expenses
will be effective or that loss development trends will not require a charge to
costs of services in future periods to increase workers' compensation accruals.

FRANCHISE AGENTS' SHARE OF GROSS PROFIT.  Franchise agents' share of gross
profit represents the net distribution paid to franchise agents based either on
a percentage of sales or of the gross profit generated by the franchise agents'
operation.  Franchise agents' share of gross profit increased $121,000 or 2.7%
for the fiscal quarter ended April 18, 1998 as compared to the fiscal quarter
ended April 19, 1997.  As a percentage of sales of services and license fees,
franchise agents' share of gross profit declined from 3.7% during the second
quarter of fiscal 1997 to 3.2% for the second quarter of fiscal 1998.  This
decrease is primarily the result of a decrease in the proportion of sales and
gross profits for franchise offices as compared to Company-owned offices.

SELLING AND ADMINISTRATIVE EXPENSES (INCLUDING DEPRECIATION AND AMORTIZATION).
Selling and administrative expenses increased $3.6 million or 19.1% for the
second quarter of fiscal 1998 as compared to the same period for fiscal 1997.
As a percentage of sales of services and license fees, selling and
administrative expenses increased from 15.3% for the fiscal 1997 quarter to
15.7% for the fiscal 1998 quarter. The increase in selling and administrative
expenses as a


                                          11
<PAGE>

WESTERN STAFF SERVICES, INC.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS
--------------------------------------------------------------------------------

percentage of sales of services and license fees is primarily due to higher
incentive compensation costs, a higher proportion of business generated through
Company-owned offices as compared to franchise offices, and higher amortization
costs resulting from increased acquisition activity.  The Company's incentive
compensation plans are directed towards increasing gross profits and operating
income.  These incentive costs increased during the second quarter of fiscal
1998 as a direct result of the significant increases in both gross profit and
operating income for the second quarter of fiscal 1998 as compared to the second
quarter of fiscal 1997.   The relative volume of franchise business also affects
the overall selling and administrative costs.  As the proportion of franchise
sales and gross profits declines relative to total sales, franchise agents'
share of gross profit declines as a percentage of sales of services and license
fees, and selling and administrative costs tend to increase as a percentage of
sales of services and license fees.

Selling and administrative expenses are also affected by the Company's
management information systems.  Starting in fiscal 1995, the Company began
conversion of all domestic business services offices to a new comprehensive
payroll and billing system.  This conversion was completed during the first
quarter of fiscal 1998.  The Company is currently in the process of completing
the development of an integrated search and retrieval function within the
payroll and billing system and expects to begin roll-out of this feature
starting in the fourth quarter of fiscal 1998.  The Company is also in the
process of evaluating and implementing available hardware and programming
options to increase the capacity of the current system to meet projected volume
increases.  The Company anticipates changing certain of its back office
financial accounting and reporting systems during fiscal 1999 to enhance
processing, inquiry and reporting functions.  Furthermore, during the second
quarter of fiscal 1998, the Company began implementation of a wide area network
(WAN) to improve communication and data flow amongst the field offices and
corporate headquarters.  The Company expects to have a pilot project relating to
the WAN completed during the fourth quarter of fiscal 1998. In addition to the
business services systems, the Company completed the conversion of its medical
services offices to a comprehensive clinical and financial accounting and
reporting package during the first quarter of fiscal 1998.  The Company is
currently working on additional enhancements to the medical system to improve
efficiency and performance of the system. There can be no assurance that the
Company will meet its anticipated completion dates for planned system
enhancements relating to its WAN, search and retrieval systems, financial and
accounting reporting systems or its medical system, or that such enhancements
will support the Company's actual future growth or provide significant gains in
efficiency.  The failure of the enhancements to meet these expected goals could
result in increased system costs and could have a material adverse effect on the
Company's business, results of operations, cash flows and financial condition.

INTEREST EXPENSE.  Interest expense increased $328,000 or 98.5% for the fiscal
quarter ended April 18, 1998 as compared to the fiscal quarter ended April 19,
1997, reflecting higher average borrowings outstanding during the fiscal 1998
quarter required to support the Company's internal growth and acquisitions.  As
a result of increased borrowings required to support the Company's growth,
acquisitions and working capital needs, the Company anticipates higher interest
expense for the remainder of fiscal 1998 as compared to fiscal 1997.


                                          12
<PAGE>

WESTERN STAFF SERVICES, INC.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS
--------------------------------------------------------------------------------

PROVISION FOR INCOME TAXES.  The provision for income taxes for the second
quarter of fiscal 1998 was $1.8 million as compared to $895,000 for the second
quarter of fiscal 1997.  This increase was due primarily to the increase in
income before income taxes of $2.2 million.  The effective income tax rate was
40.0% for each of the fiscal quarters ended April 18, 1998 and April 19, 1997.
The Company currently estimates that the effective income tax rate for fiscal
1998 will be approximately 40.0%.

24 WEEK PERIOD ENDED APRIL 18, 1998 COMPARED TO 24 WEEK PERIOD ENDED APRIL 19,
1997

SALES OF SERVICES AND LICENSE FEES.  Sales of services increased $41.6 million
or 17.3% for the 24 weeks ended April 18, 1998 as compared to the 24 weeks ended
April 19, 1997.  The increase resulted from a 12.2% increase in billed hours and
a 3.0% increase in average billing rates per hour.   Billed hours increased
primarily due to increased demand in the Company's existing offices,
acquisitions and new office openings.  Same store sales (excluding the effect of
foreign currency rate fluctuations) increased approximately 12.3% for the 24
week period ended April 18, 1998 as compared to the 24 week period ended April
19, 1997.  Acquisitions accounted for approximately $15.4 million of the
increase in sales for the 24 weeks ended April 18, 1998 as compared to the 24
weeks ended April 19, 1997.  Sales of services for the 24 week period ended
April 18, 1998 increased 15.9%, 6.7% and 48.3%, respectively, for the Company's
domestic business services, international business services and medical
services, as compared to the 24 week period ended April 19, 1997.  Excluding the
effect of foreign currency rate fluctuations, sales of services increased 17.9%
for international business services.

License fees increased $191,000 or 23.9% for the 24 weeks ended April 18, 1998
as compared to the 24 weeks ended April 19, 1997.

COSTS OF SERVICES. Costs of services increased $28.6 million or 14.9% for the 24
weeks ended April 18, 1998 as compared to the 24 weeks ended April 19, 1998.
Gross margin increased from 20.7% in the fiscal 1997 period to 22.3% for the
same period of fiscal 1998 due to the same factors as noted above for the second
quarter of fiscal 1998.

FRANCHISE AGENTS' SHARE OF GROSS PROFIT. Franchise agents' share of gross profit
increased $679,000 or 7.6% for the 24 week period ended April 18, 1998 as
compared to the 24 week period ended April 19, 1997.  As a percentage of sales
of services and license fees, franchise agents' share of gross profit declined
from 3.7% during the 24 week period ended April 19, 1997 to 3.4% for the 24 week
period ended April 18, 1998.  This decrease is primarily the result of a
decrease in the proportion of sales and gross profits for franchise offices as
compared to Company-owned offices.

SELLING AND ADMINISTRATIVE EXPENSES (INCLUDING DEPRECIATION AND AMORTIZATION).
Selling and administrative expenses increased $7.6 million or 20.8% for the 24
weeks ended April 18, 1998 as compared to the same period for fiscal 1997.  As a
percentage of sales of services and license


                                          13
<PAGE>

WESTERN STAFF SERVICES, INC.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS
--------------------------------------------------------------------------------

fees, selling and administrative expenses increased from 15.1% for the fiscal
1997 period to 15.5% for the fiscal 1998 period due to the same factors as noted
above for the second quarter of fiscal 1998.

INTEREST EXPENSE.  Interest expense increased $724,000 or 118.5% for the 24
weeks ended April 18, 1998 as compared to the 24 weeks ended April 19, 1997,
reflecting higher average borrowings outstanding during the fiscal 1998 period.

PROVISION FOR INCOME TAXES.  The provision for income taxes for the second
quarter of fiscal 1998 was $3.3 million as compared to $1.7 million for the
second quarter of fiscal 1997.  This increase was due primarily to the increase
in income before income taxes of $4.1 million. The effective income tax rate for
each of the 24 week periods of 1998 and 1997 was 40.0%.

LIQUIDITY AND CAPITAL RESOURCES

Historically, the Company has financed its operations through cash generated by
operating activities and through various forms of external financing, including
term loans, mortgage financing and bank lines of credit.  The principal use of
cash is for financing of accounts receivable, particularly during periods of
growth.  Temporary personnel are generally paid on a weekly basis while payments
from customers are generally received 30 to 60 days after billing (or longer for
medical).  As a result of seasonal fluctuations, accounts receivable balances
are historically higher in the fourth fiscal quarter and are generally at their
lowest during the first fiscal quarter.  Short-term borrowings used to finance
accounts receivable follow a similar seasonal pattern.

Net cash flows from operating activities were $3.2 million and $4.1 million for
the 24 week periods ended April 18, 1998 and April 19, 1997, respectively.  The
decrease in cash flows from operating activities is primarily due to higher
income tax payments during the fiscal 1998 period.  The Company is continuing to
focus efforts on collection of accounts receivable to reduce the overall days
outstanding, particularly for Medicare reimbursements.   The Company has
implemented a number of procedures and incentive programs for both corporate and
field staff designed to reduce the average number of days outstanding.  However,
there can be no assurance that these programs will be effective in improving the
cash flow related to Company receivables.

Cash used for capital expenditures, which are generally for software, computers
and peripherals, and office furniture and equipment, totaled $2.0 million for
the 24 weeks ended April 18, 1998 and $3.0 million for the 24 weeks ended April
19, 1997.  During the first quarter of fiscal 1998, the Company completed the
conversion of its domestic business services processing sites to the payroll and
billing portion of the Company's new management information system.   While the
payroll and billing portion of the new system is in place, the Company expects
to make further enhancements to the system to increase the volume processing
capacity of the current system, to provide integrated search and retrieval
capabilities, to implement additional modules to streamline the processing
functions and to expand its hardware capabilities.  Further, the


                                          14
<PAGE>

WESTERN STAFF SERVICES, INC.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS
--------------------------------------------------------------------------------

Company anticipates changing certain of its back office financial accounting and
reporting systems during fiscal 1999 to enhance processing, inquiry and
reporting functions. Furthermore, during the second quarter of fiscal 1998, the
Company began implementation of a WAN to improve communication and data flow
amongst the field offices and corporate headquarters.  The Company expects to
have a pilot project relating to the WAN completed during the fourth quarter of
fiscal 1998.  In addition to the business services systems, the Company
completed the conversion of its medical services offices to a comprehensive
clinical and financial accounting and reporting package during the first quarter
of fiscal 1998.  The Company is currently working on additional enhancements to
the medical system to improve efficiency and performance of the system.  The
Company has no other significant commitments for capital purchases.

During the 24 week periods ended April 18, 1998 and April 19, 1997, cash
outflows for new acquisitions and for contingent payments under existing
acquisitions totaled $5.6 million and $1.8 million, respectively. Payments of
$2.1 million and $1.5 million related to acquisitions are due for fiscal 1998
and fiscal 1999, respectively, with additional consideration contingent on
sales, gross profits or pre-tax income of the acquired businesses in future
periods.

During the 24 week periods ended April 18, 1998 and April 19, 1997, the Company
increased total borrowings by a net $2.9 million and $5.8 million, respectively.
Distributions to stockholders totaled $2.5 million in the fiscal 1997 period
representing the remaining undistributed S corporation earnings of the Company.
The Company does not anticipate declaring or paying any cash dividends on its
common stock in the foreseeable future.

During the 24 week period ended April 18, 1998, the Company repurchased 20,000
shares of common stock on the open market for aggregate cash consideration of
$342,500. As of April 18, 1998, 94,002 shares were reissued and 2,145 new shares
were issued under the employee stock option and purchase plans with aggregate
cash proceeds of $1.2 million.

The Company's senior secured credit facilities totaling $108.0 million 
consist of a $90.0 million, five-year revolving agreement and an $18.0 
million six-year term loan to provide working capital needs and for general 
corporate purposes, including capital expenditures and acquisitions.  Direct 
advances under the revolving agreement are limited by outstanding irrevocable 
standby letters of credit up to a maximum amount of $20.0 million.  As of 
April 18, 1998, the Company had $10.0 million in outstanding letters of 
credit and had borrowed $20.9 million under the revolving agreement.  The 
borrowings under the revolving agreement have been classified as long-term 
debt in the April 18, 1998 Condensed Consolidated Balance Sheet due to the 
Company's intent and ability to refinance these borrowings on a long-term 
basis.

On May 20, 1998, the Company executed private placements of 10-year senior
secured notes totaling $30.0 million payable in equal annual installments
beginning in the year 2002.  Proceeds from the notes were used to repay
outstanding borrowings under the revolving agreement of $22.6 million, with the
remainder to be used for working capital and general corporate purposes.


                                          15
<PAGE>

WESTERN STAFF SERVICES, INC.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS
--------------------------------------------------------------------------------

The Company believes that cash from operations and the Company's current
borrowing capacity will be sufficient to meet anticipated needs for working
capital and capital expenditures at least through the next twelve months.

MEDICAL OPERATIONS

As a provider of home care services, Western Medical Services, Inc. is subject
to changing federal and state regulations relating to the licensing and
certification of its offices and the sale and delivery of its services.  Changes
in the law and regulations as well as new interpretations enforced by the
relevant regulatory agencies could have a material adverse effect on the
Company's business, results of operations, cash flows and financial condition.

On August 5, 1997, President Clinton signed into law the Balanced Budget Act of
1997 (Budget Act), resulting in significant changes to cost based reimbursement
for Medicare services provided by home health care providers.  Cost limits were
reduced for fiscal years beginning on or after October 1, 1997.  Home health
agencies will be reimbursed the lowest of:  (1) actual costs of operating the
agency's Medicare services; (2) a reduced aggregate cost per visit rate; or (3)
an aggregate per beneficiary limit.

The Budget Act requires the Health Care Financing Administration of the U.S.
Department of Health and Human Services (HCFA) to implement a Prospective
Payment System (PPS) for fiscal years beginning on or after October 1, 1999 to
replace this cost-based system.  The PPS will pay home health agencies a fixed
amount for services rendered without regard to their costs.  There can be no
assurance that such reimbursement rates will cover the costs incurred by the
Company to provide Medicare home health care services.

The impact of these changes on the Company will be to reduce the amount of
costs that will be reimbursable, pursuant to the Medicare program, effective
November 2, 1997.  However, as the Company has not yet received its specific
provider based per-beneficiary limits from HCFA, it is not possible to quantify
the actual amount of the impact of the new reimbursement rates on the Company's
results of operations.  To address the potential impact of these reimbursement
reductions, the Company is assessing the effectiveness of its patient care
services and is developing strategies to increase efficiency in providing care
to patients.  In addition, the Company is reviewing its expenditures for
operating costs and general and administrative expenses in an effort to ensure
that its costs will be within the amounts that may be reimbursable under the
new regulations.  The Company currently estimates that the potential effect of
the new regulations will not be material to the Company's results of operations
for fiscal 1998.  However, because the Company cannot presently determine the
actual number of patients that will be serviced, the severity of their illnesses
or the extent of its ability to reduce general or administrative expenses, and
as the Company has not yet been furnished with its specific provider based
per-beneficiary limits, there can be no assurance that the ultimate adjustments
to revenue as a result of the new regulations will not have a material adverse
effect on the business, financial condition, cash flows or results of operations
of the Company.


                                          16
<PAGE>

WESTERN STAFF SERVICES, INC.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS
--------------------------------------------------------------------------------

YEAR 2000

The Company is in the process of evaluating the impact of the Year 2000 issue
and expects to complete such evaluation during fiscal 1998.  The Year 2000 issue
is the result of computer programs being written using two digits rather than
four to define the applicable year.  Any programs that have time-sensitive
software may recognize a date using "00" as the year 1900 rather than the year
2000.  This could result in a major system failure or miscalculations. The
Company presently believes that, with minor modifications to existing software
and planned software upgrades and replacements, the Year 2000 issue will not
pose significant operational concerns nor have a material adverse effect on the
Company's business, financial condition, cash flows or results of operations in
any given year.   Although the Company does not currently expect that the impact
of this computer program flaw will be material, there can be no assurance that
the Company will not discover Year 2000 issues with respect to the Company's
computer systems in the course of its evaluation process that would have a
material adverse effect on the business, financial condition, cash flows or
results of operations of the Company.  In addition, the Year 2000 issue may
impact other entities with which the Company transacts business, and there can
be no assurance that such impact will not have a material adverse effect on the
business, financial condition, cash flows or results of operations of the
Company.


                                          17
<PAGE>

PART II.  OTHER INFORMATION
--------------------------------------------------------------------------------


Item 1.     LEGAL PROCEEDINGS

               The Company is not currently a party to any litigation that
            could have a material adverse effect on its business, results of
            operations, financial position or cash flows.  However, from time
            to time the Company has been threatened with, or named as a
            defendant in, lawsuits, including countersuits brought by former
            franchise agents, and administrative claims and lawsuits brought by
            employees or former employees.

Item 2.     CHANGES IN SECURITIES

               Not applicable.

Item 3.     DEFAULTS UPON SENIOR SECURITIES

               Not applicable.

Item 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

             (a)  At the Annual Meeting of Stockholders on March 26, 1998, the
          following were elected as Class II directors to serve three-year terms
          and until their successors are elected:
<TABLE>
<CAPTION>

                                                       Votes
                                                    ------------
                                               For            Withheld
                                             -----------    -------------
             <S>                             <C>              <C>
             Michael K. Phippen..........    9,323,242         31,358
             Paul A. Norberg.............    9,295,762         31,358
</TABLE>
             (b)  At the Annual Meeting of Stockholders the following additional
                  matters were voted upon:

                  1.     A proposal to ratify the selection of Price Waterhouse
                         LLP as independent accountants for the Company for the
                         fiscal year 1998 ending October 31, 1998.

                              Affirmative votes:        9,323,242
                              Negative votes:               3,199
                              Abstentions:                    679
                              Non-votes:                        0

                  2.     A proposal to amend (i) Articles Two and Three of the
                         Company's 1996 Stock Option/Stock Issuance Plan (the
                         "Plan") to provide for greater transferability of
                         Non-Statutory Options, and (ii) Article Three of the
                         Plan to provide for an increase in the annual automatic
                         option grant to each Eligible Director on the date of
                         each Annual Meeting


                                          18
<PAGE>

PART II.  OTHER INFORMATION
--------------------------------------------------------------------------------

                         (beginning with the 1998 Annual Meeting) from 1,000
                         shares to 2,000 shares of Common Stock, subject to the
                         restrictions of the Plan.

                              Affirmative votes:        9,126,677
                              Negative votes:             123,053
                              Abstentions:                 77,190
                              Non-votes:                        0


Item 5.        OTHER INFORMATION

                  Not applicable.


Item 6.        EXHIBITS AND REPORTS ON FORM 8-K

                  (a)    Exhibits

                                   EXHIBIT INDEX
Exhibit
Number                           Description
------                           -----------

10.8.8         First Amendment to Credit Agreement dated as of May 15, 1998
10.8.9         Note Purchase Agreement dated May 15, 1998

27.1           Financial Data Schedule

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

                  (b)    Reports on Form 8-K

                  No reports on Form 8-K were filed in or for the 24 week period
               ended April 18, 1998.


                                          19
<PAGE>

                                     SIGNATURES

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


                                 WESTERN STAFF SERVICES, INC.


     June 2, 1998                         /Paul A. Norberg/
     ------------                 --------------------------------------
        Date                               Paul A. Norberg
                                  Executive Vice President, Chief Financial
                                         Officer and Director


                                          20