Top recruiters warn of tough conditions in jobs market as they axe staff to cut costs

Top recruiters Robert Walters and Hays have sounded the alarm over challenging conditions in the jobs market

Top recruiters Robert Walters and Hays have sounded the alarm over challenging conditions in the jobs market, as both companies reported a dip in income and confirmed staff redundancies to slash costs.

Robert Walters revealed a 16% fall in gross profit to £81million for the quarter ending March, year-on-year. The firm highlighted a particularly tough UK market, with profits plunging by 20%, yet noted a silver lining with London seeing income rise for the first time in over twelve months.

Despite some positive shifts in the economic landscape, such as easing inflation, Robert Walters stressed that “general environment remains one where client and candidate confidence is at low levels”. The company has seen its workforce diminish by 13% compared to last year, including around 170 staff cuts since the close of 2023, as it maintains strict cost control while aiming to fortify the business.

Hays, on the other hand, which focuses on white-collar job placements, reported a 14% like-for-like decline in group fees for the quarter ending March, compared to the same period the previous year. In the UK and Ireland, the agency’s fees fell by 16% annually, with the tech sector experiencing the steepest drop, where fees plummeted by almost one-third.

Hays has assured investors that they are on track to save approximately £50million a year by the summer. It came as it revealed its total headcount had also decreased by 13% compared with the previous year as the firm said it was focusing on being more efficient.

Hays’ chief executive Dirk Hahn said: “While economic uncertainties remain, we have a strong and clear strategy and will continue to build a more resilient business through greater focus, increased operational rigour and strong cost management.”

Fresh data revealed that UK’s unemployment rate climbed to 4.2% over the three months to February – the highest figure in nearly half a year, whilst job vacancies continued their downward trend. Job markets have faltered worldwide over the past year amid a more uncertain economic outlook and businesses facing higher costs.