The UK’s largest recruitment company reported “better-than-expected” annual earnings despite a 10% slide in second-half operations, but warned it would still be forced to cut jobs.
Recruitment consultant Hays saw pre-tax profits increase 24% overall to £264m in the 12 months to 30 June, and blamed the second-half slide in profits on a lower demand for permanent and temporary positions.
“UK demand for permanent placements is falling – as is Australia – and demand for temporary jobs has dropped off to a flat position so we need to reduce costs further, which will have an impact on our overall UK headcount,” said Alistair Cox, Hays’ group chief executive.
The company started the first half well, claiming international business had buoyed sales and profits. But in the second half, Cox was brought in to run the UK and Ireland business, cutting the headcount by 7% – about 400 people – by not replacing employees lost through “natural attrition”.
Cox compared the current economic slowdown to that seen in the late 1980s and early 1990s, when Britain was last technically in recession.
Earlier this week, law firm Peninsula found nearly two-thirds of employers expected to cut jobs in the coming months.