Hays Reports 91% Drop in Profits and Cost-Cutting Actions

Recruitment firm Hays has announced a significant cost-cutting initiative, aiming to reduce expenses by an additional £30 million following a dramatic decline in annual profits. The company reported a staggering 91% drop in pre-tax profits, falling to £14.7 million for the year ending June 30, with net fees decreasing by 12% to £1.1 billion. Although underlying pre-tax profits halved to £94.7 million, Hays noted that global hiring conditions have remained challenging throughout the summer, making it difficult to predict trends for the upcoming year. Chief Executive Dirk Hahn, who assumed leadership in August 2022, is spearheading a comprehensive cost-reduction strategy targeting a total of £60 million in annual savings. The latest round of cuts will primarily affect back-office roles, particularly in finance and technology, as the firm seeks to streamline operations. Hays plans to achieve these savings through measures such as eliminating duplicated costs, selective outsourcing, and enhancing the standardization of processes. Despite the cuts, Hays indicated that its consultancy workforce would remain stable in the first quarter of the new financial year, although the overall workforce is expected to decrease slightly due to the back-office reductions. The company has faced increasingly difficult market conditions, particularly in its largest markets of Germany, Australia, and the UK, where earnings plummeted by 78% in the past year. In the UK and Ireland, Hays has reduced its consultant workforce by 16% and closed 10 offices since December, leaving a total of 75 locations in the region. The firm attributes its struggles to decreased client and candidate confidence, which has led to a slowdown in permanent recruitment activity.