Recruiter Hays warns global slump in hirings will more than halve its profits

A slump in hiring activity at businesses around the world means profits will more than halve at Hays, the global recruitment company has warned, sending its shares to their lowest level in more than a decade

Demand for new permanent staff has fallen sharply, reflecting “low levels of client and candidate confidence as a result of macroeconomic uncertainty”, Hays told investors in an unscheduled update.

The recruiter, which finds workers across the world for corporations such as Airbus and Sony, now expects its pre-exceptional operating profit to be about £45m for its current financial year, compared with City expectations of £56.4m. It would mark a more than 50% drop against last year, when Hays reported a profit of £105.1m.

“This is not wholly unsurprising given the enhanced macro-political uncertainty, and the fact that new job inflow is reducing … it is clear that a recovery is unlikely anytime soon,” analysts at the broker RBC Capital Markets said in a note.

Hays said it expected like-for-like net fees to be down 9% in the final quarter of its financial year. Fees from the permanent job market were expected to drop by 14%, with temporary and contracting work down 5%.

Shares in Hays fell by as much as 20% on Thursday, sending it to the bottom of the FTSE 250 index of medium-sized companies and to its lowest level in 13 years.

The warning also pushed shares in rival recruiter PageGroup, which generates just under three-quarters of its fees from permanent hiring, down by 8%. Shares in Dutch rival Randstad also dropped by 4% in early trading.

Hays said that in Germany, which made up about two-thirds of the company’s operating profit in 2024, temporary hiring was also affected because its high exposure to the car industry. The sector was already struggling, with profit warnings at BMW and Mercedes and moves to shut factories at Volkswagen, and has been hit further this year by the uncertainty around US trade tariffs.

In the UK and Ireland, Hays said it expected net fees to drop 13%, and to fall by 9% in Australia and New Zealand.

This month, official figures showed that more than 250,000 jobs have been lost in Britain since Rachel Reeves’s autumn budget. Separate figures from the Office for National Statistics also showed that the official UK unemployment rate rose to 4.6% in the three months to April, up from 4.5% in the previous three-month period, to reach the highest level since July 2021.