Hays PLC, the global recruitment group, delivered a sobering update on its full-year results, painting a picture of a hiring market still mired in uncertainty across its biggest geographies. In the year to 30 June, the company reported net fees of £972.4 million, down 11% on a like-for-like basis, with permanent recruitment the weakest link as volumes contracted sharply across major markets. The firm said the difficult market translated into a dramatic drop in profitability, with pre-tax profits tumbling by 90% year on year to just £1.5 million and profit before exceptional items down by around two-thirds to £32.2 million. The numbers underline a stark reality for Hays as it grapples with a combination of macroeconomic headwinds and sector-specific softness, particularly in Germany, which the group has long viewed as a key driver of profits.

The company has responded with an aggressive cost-control programme designed to reshape its cost base in a slower-for-longer environment. Hays disclosed around £35 million of annual structural savings and laid out a target to achieve a further £45 million of annual savings by FY29, lifting the cumulative programme to about £80 million. As part of that effort, the group has closed or merged 29 offices over the past year and reduced its recruitment consultant headcount by roughly 14%, a global move that coincided with the elimination of nearly 1,000 roles worldwide, including about 350 in the UK and Ireland. Despite these measures, management warned that activity in July and August had not meaningfully improved and it was too early to judge September, a traditionally important trading month for the sector. The company attributed its stubbornly weak results to a persistent slow jobs market and the particular weakness of Germany, while emphasising that its strategy remains focused on prioritising in-demand sectors, roles and geographies and expanding exposure to temporary and contracting recruitment. The market has reacted with caution; current trading in the near term was described as broadly in line with expectations, according to the group’s update in mid-July. According to the company’s statements reported by market observers, the outlook hinges on a broader recovery in hiring activity and the timing of market stabilisation, especially in Europe’s autos-intensive economy.

Beyond Germany, analysts noted that the broader macro environment continues to weigh on the group’s earnings trajectory. Reuters highlighted that the full-year pre-exceptional operating profit was guided towards around £45 million, a fall of more than 57% versus consensus expectations, with the firm pointing to a broad slowdown in permanent hiring and longer decision times across regions. Germany’s exposure to the automotive sector and tariff concerns contributed to the weakness, underscoring the challenge of translating cost discipline into sustained profitability. The Guardian likewise reported that profits are expected to be halved in the face of global hiring slowdowns, with autos demand and tariff chatter amplifying weakness in the European market. Meanwhile, City A.M. noted that management continues to press ahead with its efficiency drive while maintaining a focus on productivity improvements, even as current trading remains subdued.

Taken together, the updates reflect a company that has acted decisively to shore up margins in a difficult environment, while remaining unperturbed about the longer-term opportunity set in its core markets. The scale of cost savings and office consolidation points to a company intent on preserving cash flow and competitive position during a period of structural nerves in the labour market. However, with Germany continuing to weigh on the group’s profitability and with the broader hiring cycle still uncertain, investors and clients alike will be watching closely for signs of a meaningful upturn in client confidence and candidate activity. Industry observers emphasise that the next several quarters will be critical in determining whether Hays can translate its cost-base reductions into a sustainable improvement in profits as market conditions gradually improve.

Reference Map:

Source: Noah Wire Services