Hays Recruitment Announces Major Workforce Reductions Amid Challenging Market
Global recruitment giant Hays has unveiled significant cuts to its workforce as it intensifies cost-saving measures in response to a persistently difficult jobs market. The company revealed it has reduced its worldwide consultancy staff numbers by 14% year-on-year for the three months ending March, alongside a 7% reduction in non-consultancy employees.
Cost-Saving Targets and Financial Performance
These cuts form part of a broader strategy to achieve annual cost savings of £45 million by the 2028-29 financial year. Approximately £30 million of these savings are expected to be delivered in the year to the end of June, with about £15 million realised during the third quarter alone. Hays reported that its consultancy workforce is now "appropriate for current market conditions" and anticipates it will remain broadly stable in the upcoming fourth quarter.
The firm emphasised its commitment to "structurally reduce our cost base to position Hays strongly for when end markets recover." Despite the challenging environment, Hays maintained its underlying operating profit guidance at £45.2 million, though it reported underlying earnings of £45.6 million for 2024-25, marking a steep 57% decline from the previous year.
Regional Performance and Market Impact
In the UK and Ireland, the group cut consultant numbers by 16% year-on-year during the third quarter, coinciding with a 10% drop in net fees. Germany, Hays' largest market, experienced an 11% decline in net fees, contributing to an overall group-wide fee decrease of 8%. However, shares in Hays rose by 7% as the decline in group fees was less severe than the 10% drop recorded in the preceding three months.
Mark Dearnley, interim chief executive of Hays, commented on the situation, stating, "We remain mindful of heightened global macro-economic uncertainty and the impact this could have on the wider economy. However, we are executing well and taking decisive actions to improve our portfolio and restore our financial performance. We continue to make strong progress with our structural cost and productivity initiatives and expect the full financial benefits to build over time."
The company cautioned that job market conditions are likely to remain "challenging" in the near term, reflecting ongoing economic pressures. These workforce reductions underscore the broader struggles within the recruitment sector as firms adapt to fluctuating demand and economic uncertainty.
