PageGroup, a leading recruitment company, has warned that profits will decline this year as economic uncertainty and geopolitical tensions further weigh on the already weakened global job market.
The Surrey-based company reported a gross profit of £224.3 million in the second quarter, representing a 12 percent decline year-over-year at constant exchange rates. Employers facing challenging economic conditions are delaying their hiring decisions, contributing to this decline.
PageGroup reported that there are "no immediate signs of improvement" in most of its markets. The difficult trading conditions forced the company to cut 153 jobs during this three-month period, reducing the number of employees from over 7,000 in September 2022 to 5,598.
The company added that employers have increasingly become "risk-averse" as their "recruitment budgets have tightened." Although salaries remain strong, offers are no longer as high as they were in the past two years. Candidates are also hesitant to change jobs.
After weaker-than-expected trading in June and recent geopolitical and macroeconomic uncertainty, the company expects annual operating profit to be around 60 million pounds, compared to 118.8 million pounds last year. Analysts had previously expected a figure of around 90 million pounds.
Here's the translation of the given heading to English:
"Shares of the company fell by nearly 8 percent in early trading on Tuesday before reducing some of these losses to around 5 percent by midday. Shares of rival Hays, which will present its annual results on Thursday, had fallen by about 4 percent by midday, while those of the Swiss Adecco Group dropped by around 2 percent.
We experienced a slowdown in activity levels during the quarter, particularly regarding newly registered job positions and the number of interviews," said PageGroup CEO Nicholas Kirk, adding that it has become increasingly difficult to convert interviews into accepted offers. Kirk explained that gross profit alone in June had decreased by 18 percent year-on-year.
The company, which operates in 37 countries, recorded weak results in most of its markets, including the USA, France, Germany, and the UK. In the UK, profits fell by 17.4 percent, while profits on the Chinese mainland decreased by 25 percent and in Hong Kong by 38 percent.
The gross profits from temporary hires declined by 9.8 percent in the second quarter, compared with a 12.8 percent decline in the gross profits from permanent hires, as employer caution led to relative resilience in temporary roles.
However, the rate of decline in profits from temporary hires also worsened compared to the first quarter. Russ Mould, an analyst at AJ Bell, said: "It will be of particular concern to the company's shareholders and possibly also to economists and policymakers that temporary hires continue to be under pressure.
Despite last year's cuts in its own workforce, PageGroup stated that it plans to "maintain the number of fee earners at the existing level" to ensure the company is "well positioned to seize opportunities as sentiment and confidence improve.
