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298 North Wiget Lane, Walnut
Creek , CA 94598 •
1.877.Westaff  www.westaff.com

August 3, 2005

  U.S. Securities and Exchange Commission

  Via Facsimile Transmission

  Division of Corporation Finance

  & Edgar Transmission

  Mail Stop 0407

  100 F Street, N.E.

  Room 3528

  Washington, DC 20549

Attn:  Ms. Christine Bashaw

Westaff, Inc.

Form 10-K for Fiscal Year Ended October 30,
2004

Filed January 28, 2005

Forms 10-Q for Fiscal Year Ended April 16,
2005

File No. 0-24990

Dear Ms. Bashaw:

Pursuant to Rule 101(a)(1)(iii) of
Regulation S-T, Westaff, Inc., a Delaware corporation (the “Company”) is
transmitting via EDGAR this correspondence in order to respond to the letter,
dated July 25, 2005, from the staff of the Securities and Exchange
Commission (the “Staff”) regarding the above-referenced periodic reports. We
welcome your insight and appreciate the purpose of the comments, which we
understand are designed to enhance the overall disclosure of our filings. Our
response to your comments appears below. The relevant text of the Staff’s
comments has been included in this letter, and the numbering of the Company’s
responses corresponds to the numbering in the Staff’s letter.

Form 10-K for Fiscal Year Ended October 30,
2004

Management’s Discussion and Analysis of
Financial Condition and Results of Operations, page 16

1.                                       We
note your use of the term “constant currency” in your discussion of revenue.
This appears to be a non-GAAP measure. Accordingly, since it appears that you
present this as an operating performance measure, it is generally not
appropriate to exclude the effects of foreign currency translation gains as
they are or could be recurring in nature. Revise future filings to delete the
use of “constant currency.” Please refer to Item 10 of Regulation S-K and
Question 8 of our Frequently Asked

Questions document on non-GAAP measures which
is available on our website at
http://www.sec.gov/divisions/corpfin/faqs/nongaapfaq.htm.

The Company analyzes revenue on both an “as-reported” basis and on a
constant currency basis to better measure the comparability of results between
periods and in our analysis of subsidiary or segment performance.  Because changes in foreign currency exchange
rates have a non-operating impact on revenue, the Company believes that
evaluating growth in revenue on a constant currency basis provides an
additional and meaningful assessment of revenue.  If the Company uses the term “constant
currency” in future filings, we will include the reconciliations and
disclosures as required by Regulation G and as outlined in Final Release No. 34-47226.

Notes to Consolidated Financial Statements, page F-6

Note 2. Summary of Significant Accounting
Policies, page F-6

Revenue Recognition

2.                                       In
future filings expand your accounting policy to address your revenue
recognition policy for services provided from your company-owned operations.
Clearly indicate if revenue is presented on a gross or net basis is accordance
with EITF 99-19 and why.

The Company will expand its discussion of revenue recognition in future
filings to clearly indicate that revenue is presented on a gross basis and to
include the relevant indicators that it has assessed that require it to account
for revenue on a gross basis in accordance with EITF 99-19.

3.                                       Your
basis for presenting franchise revenue and related cost of sales on a gross
basis in accordance with EITF 99-19 is not clear. Please tell us about your
franchise operations, providing enough information to allow us to understand
why you believe it is appropriate to recognize revenue and related costs from
these operations on a gross basis.

The franchisee acts as the Company’s agent and local business
representative in a similar manner as a branch manager in company-owned
locations.  In the franchise arrangement,
all advertising, signage, invoices and correspondence with the customer are in
the Company’s name.  The Company has the
direct contractual relationships with its customers.  Contracts with customers are with the Company
and bind the Company.  From the customer’s
perspective, they typically are unaware that they are dealing with a franchise
agent. The Company owns all receivables from the point the receivables are
created.  The Company has the ultimate
credit risk and will incur losses on uncollectible receivables.

The franchise agreement precludes the franchisee from performing any
services to a customer not specifically allowed by the Company under the terms
of the agreement. The Company is the employer of all temporary employees and as
such is obligated for the temporary employee payroll and related payroll
taxes.  The Company has the obligation

to pay its temporary employees regardless of customer acceptance of the
temporary labor services.  The Company
pays state unemployment insurance and as such, bears the risk if it is not able
to place an active temporary employee on another assignment when a temporary
employee’s assignment ends.

4.                                       We
note that you recognize “franchise agent’s share of gross profit” below gross
profit. Please tell us in more detail what this charge represents and why you
do not consider this distribution to be a cost of service.

As the Company retains the risks and rewards of ownership (as noted in
the response to comment 3 above), the revenue and direct expenses of its
franchise operations are included in the Company’s revenue and direct
costs.  The franchise agent’s share of
gross profit represents the net distribution paid to the franchise agent for
their services in marketing to customers, recruiting temporary employees and servicing
customer accounts.  Those services are
considered to be selling and administrative in nature.

5.                                       It
is not clear what payrolling services are, as disclosed on page 4. Please
explain and, if material, tell us if you present revenue associated with these
services on a gross or net basis in accordance with EITF 99-19 and why.

Some of the Company’s customers choose to transfer a portion of their
short-term or seasonal workforce over to the Company, enabling them to reduce
administrative functions relating to payroll and benefits and to better manage
cash flow.  In such circumstances, the
customer assists the Company in recruiting employees.  When these employees are transitioned to
Westaff, the Company becomes the legal employer of these employees and is
obligated for the payroll and related payroll costs.  The Company may also re-deploy these
employees at its discretion.  The Company
bills the customer for the temporary employees services and has all the
contractual obligations it would have with any other customer, and therefore
the revenue and direct costs of these services are presented gross in
accordance with EITF 99-19.  For the
fiscal year ended October 20, 2004, payrolling services accounted for 2.2%
of total domestic revenue.

Note 5.
Goodwill, page F-9

6.                                       Addressing
paragraphs 30 and 31 of SFAS No. 142, tell us how you determined the
reporting units used to perform your goodwill impairment test and tell us what
those reporting units are.

7.                                       Revise
to disclose the information required by paragraph 45(c) of SFAS No. 142.

Under the provision of SFAS No. 131, the Company identified its
operating segments based on three primary characteristics:

1.               The segment engages
in business activities from which it may earn revenues and incur expenses;

2.               The operating
results of the segment are regularly reviewed by the Company’s chief operating
decision maker to assess the performance of the individual segment and make
decision about resources to be allocated to the segment; and

3.               Discrete financial
information about the segment is available.

Based on these characteristics, the Company identified its operating
segments as each company-owned domestic geographic region or district, the
franchise operations in total as a distinct region and each of the Company’s
international subsidiary operations as a separate operating segment.  The Company further determined that there
were no components of any of these operating segments that would qualify as a
reporting unit under paragraph 30 of SFAS No. 142.

Because the purpose of SFAS No. 142 is to determine potential
impairment of recorded goodwill, and because none of the international
subsidiaries, other than Australia, have any goodwill recorded or associated
with their operations, the United Kingdom, Denmark, Norway and New Zealand
operating segments are combined into an “Other International” reporting unit
for SFAS No. 142 valuation purposes.

Please refer to the last sentence of the last paragraph of Note 5 “The
increase in the carrying amount of goodwill of $73 during the fiscal year ended
October 30, 2004 was due to the effect of foreign currency translation.”  As this was the only item affecting the
carrying amount of goodwill during the period, we believe that this fulfills
the disclosure requirements of paragraph 45(c) of SFAS No. 142.

In connection with your letter of July 25, 2005, we hereby
acknowledge that:

•                  the
company is responsible for the adequacy and accuracy of the disclosure in the
filings;

•                  staff
comments or changes to disclosure in response to staff comments do not
foreclose the Commission from taking any action with respect to the filings;
and

•                  the
company may not assert staff comments as a defense in any proceeding initiated
by the Commission or any person under the federal securities laws of the United
States

Should you have any questions regarding this letter please contact the
undersigned at 925-256-1518.

Sincerely,

  /s/ Dirk A. Sodestrom

  Dirk A. Sodestrom

  Senior Vice President and Chief Financial
  Officer