Recruitment firm PageGroup has described the UK jobs market as 'tough but stable' as it continues to slash costs to offset difficult trading conditions. The company reported a 5.3% drop in UK gross profit for the three months to the end of June, an improvement on the 11.4% decline seen in the previous quarter.
On the UK outlook, PageGroup said: 'The market remains tough but stable, with pockets of optimism beginning to appear.' Technology recruiting and its Page Executive offering are among the areas showing signs of improved trading, the firm added.
Group-Wide Performance and Market Reaction
Group-wide gross profits fell 0.2% on a constant currency basis to £197.6 million in the quarter. However, around half of the group is now seeing growth worldwide, with southern Europe returning to growth. Shares in the firm surged more than 15% as investors hoped the worst of the job market troubles were over. This followed a boost from Hays on Friday, which reported it is on track for profits at the top of guidance.
Cost-Cutting Measures
PageGroup continues to trim costs in the face of the tough jobs market. It cut another 80 fee earners in the second quarter, a 1.6% year-on-year reduction to 4,994, while non-fee earners were down 2.3%. The firm said it remains on track for annual earnings of around £28 million, an improvement on the £20.9 million reported in 2025. However, it added a note of caution over the outlook.
Nicholas Kirk, chief executive of PageGroup, said: 'Whilst we have seen improvement and signs of a normalisation in trading in a number of our markets, there remains a high degree of uncertainty in the outlook for the rest of the year.' He added: 'We have a flexible cost base through our fee earner headcount, which adjusts naturally to market conditions. Alongside this, we continue to control the cost base tightly and have undertaken various programmes since the launch of our new strategy to manage it in light of the tougher market conditions.'
Actions include cutting support staff, closing offices, and reducing management layers, which together have saved around £40 million each year. 'This cost base control has continued in 2026,' Mr Kirk said.
Industry Analyst Commentary
Dan Coatsworth, head of markets at AJ Bell, said: 'It's been an awful time to be a recruitment consultant in recent years as labour markets soften around the world. Businesses have delayed investment decisions, and the rise of AI has led to workforce cutbacks.' He added: 'Last month, PageGroup's shares hit a 23-year low as market pessimism engulfed the stock. The second quarter commentary has clearly helped to improve sentiment, but certain investors might need more convincing than just one solid trading update.'
