PageGroup warns over profits and axes jobs amid gathering hiring gloom
The recruitment company’s gross profits fell 8.9% to £237.3 million year on year in the final three months of 2023.
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Your support makes all the difference.PageGroup has become the latest recruiter to warn over profits and reveal staff cuts as it grapples with a slowing jobs market.
The company said it shed 224, or 3.7%, of its fee-earning roles and 57 back office jobs in the final three months of 2023, with reductions made across all its regions worldwide.
It warned that full-year earnings are now expected to be slightly below the £120 million to £125 million it guided for previously.
PageGroup joined rivals Hays and Robert Walters in flagging weaker confidence among firms and job candidates over new positions, with trading conditions worsening towards the end of last year.
Despite the year-on-year decline in gross profit, we are still seeing good activity levels, albeit we did see a deterioration in job flow through the fourth quarter
The business’s gross profits fell 8.9% to £237.3 million year on year in the final three months of 2023, with the company noting that uncertainty among hirers and the approaching year-end salary reviews and bonuses made trading particularly challenging in the quarter.
The UK was its worst-performing region, with gross profits slumping 19.9%, while it said conditions also worsened across Europe.
PageGroup signalled that wage growth is starting to ease back, saying “offers made to candidates are not as elevated as they were in 2022”.
Chief executive Nicholas Kirk said: “Despite the year-on-year decline in gross profit, we are still seeing good activity levels, albeit we did see a deterioration in job flow through the fourth quarter.
“However, these activity levels are not all converting into gross profit due to ongoing lower levels of candidate and client confidence.”
He said the group’s costs are “under continuous review and can be adjusted rapidly to match market conditions”.
We continued to see clients deferring hiring decisions and candidates becoming increasingly cautious about accepting offers
Last week, Hays and Robert Walters both said they were cutting roles as job markets weakened, with Hays warning that profits would be lower than forecast and expectations for trading to remain challenging.
PageGroup said that in the UK, which accounts for 12% of group fee income, its workforce fell by 79 to 1,164 during the fourth quarter.
“We continued to see clients deferring hiring decisions and candidates becoming increasingly cautious about accepting offers,” it said.
In the UK, gross profits tumbled 23% across Michael Page and were 15% lower at Page Personnel.