Global recruitment firm Hays has warned that its annual profits will more than halve due to a sharp decline in hiring activity worldwide, sending its shares down more than 10% on Thursday. The company now expects pre-exceptional operating profit of about £45 million for its current financial year, down from £105.1 million last year and below City forecasts of £56.4 million.
In an unscheduled update, Hays cited “low levels of client and candidate confidence as a result of macroeconomic uncertainty” for the slump in demand for new permanent staff. The recruiter, which places workers for corporations such as Airbus and Sony, said like-for-like net fees are expected to fall 9% in the final quarter, with permanent job fees dropping 14% and temporary and contracting work down 5%.
Shares in Hays fell as much as 20% in early trading, hitting a 13-year low, before recovering to trade 11% lower by midday. The warning also dragged down rival PageGroup by 8% and Dutch competitor Randstad by 4%. Analysts at RBC Capital Markets noted the downturn was “not wholly unsurprising” given heightened macro-political uncertainty, adding that a recovery appears unlikely soon.
Hays highlighted particular weakness in Germany, which contributed about two-thirds of its operating profit in 2024, where temporary hiring has been hit by exposure to the struggling automotive industry. The sector has faced profit warnings at BMW and Mercedes, factory closures at Volkswagen, and uncertainty over US trade tariffs. In the UK and Ireland, net fees are expected to drop 13%, while Australia and New Zealand will see a 9% decline.
The warning comes as official figures show over 250,000 jobs have been lost in Britain since the autumn budget, with the UK unemployment rate rising to 4.6% in the three months to April, the highest since July 2021.
