PageGroup slashes workforce as earnings plunge amidst job market crisis

In recent months, PageGroup, a recruitment firm, has reported significant challenges in the jobs market, particularly in Europe. During the final quarter of 2024, the company's group gross profits fell considerably, recording a decline of 17.2% to £196.7 million, even worse when excluding currency effects. This disappointing performance was attributed to worsening conditions in critical markets, notably in France and Germany, which are among the company's largest markets. The struggles in the recruitment industry have led PageGroup to announce additional workforce cuts in an effort to align with market demands. The company revealed that it reduced its fee-earner workforce by 2.4%, resulting in 130 roles eliminated and a further 49 back office positions removed. PageGroup is actively responding to the need for cost-cutting throughout its operations, having closed shared service centers located in the UK and Singapore. Instead, operations will be shifted to locations such as Barcelona, Buenos Aires, and Kuala Lumpur, which has resulted in one-off closure costs amounting to £5 million. Nicholas Kirk, the chief executive, expressed concern over the persistent macro-economic and geopolitical uncertainties that continue to affect client and candidate confidence. As the conversion of interviews into accepted offers falters, Kirk pointed out that the ongoing uncertainty has also extended the time-to-hire, aggravating conditions in the recruitment sector. He mentioned that while most markets seem stable, the significant issues arise particularly in the European context, reinforcing the need to continuously review the company’s fee earner headcount to align with the activities they are observing across different markets. Moving forward, PageGroup anticipates its full-year earnings to fall within the lower end of the expected range of £49 million to £58.5 million. This projection highlights the profound impact of the weak job market on overall business performance, as noted in their latest financial reporting. The recruitment firm’s strategy involves reallocating resources to prioritize areas with long-term structural opportunities, adapting to the complexities of the current economic landscape, and preparing for continued instability ahead.