Hays warns over profits after ‘clear slowdown’ in December hiring

It said group consultant employee numbers were 450 lower globally during the final three months of 2023, including about 50 in the UK.

This was down 5 per cent quarter-on-quarter and 12 per cent year-on-year, although consultancy cuts were made largely through natural staff turnover, according to Hays.

The firm has also axed around 150 non-consultant roles – a 3 per cent reduction in those teams during the fourth quarter – including about 10 jobs in the UK.

Hays said group fees slumped 15 per cent last month and were 10 per cent lower overall in the quarter.

It now expects first-half underlying operating profits of around £60m.

Analysts had been expecting earnings of around £73m for the half-year.

Dirk Hahn, chief executive of Hays, said: “Overall market conditions became increasingly challenging through the quarter, including a clear slowdown in most markets in December, notably in our permanent businesses as client and candidate decision-making slowed.”

He added: “Given increased uncertainties and reduced client and candidate confidence, our New Year ‘return to work’ is particularly important, and we are closely monitoring activity levels.

“It is too early to say if December’s weakness reflects a sustained market slowdown or some placement deferrals, however, we expect near-term market conditions to remain challenging.”

It said actions in its first half would help slash annual costs by around £30m, with “further material savings” expected in the final six months.

Net fees tumbled by 17 per cent across the UK and Ireland division, which accounts for a fifth of group fee income.

London and Scotland were particularly affected by the slowdown, where net fees dropped 21 per cent and 26 per cent respectively.

It said that across specialisms, net fees in its two largest businesses – accountancy and finance, and technology – decreased by 16 per cent and 32 per cent respectively.

Earlier this week, online building materials supplier CMO warned over annual earnings as it said economic uncertainty continues to hit the construction and home repairs sector. CMO said orders had been lower than usual at the end of 2023.