PageGroup warns over profits and axes jobs amid gathering hiring gloom

It warned that full-year earnings are now expected to be slightly below the £120m to £125m it guided for previously.

PageGroup joined rivals Hays and Robert Walters in flagging weaker confidence among firms and job candidates over new positions, with trading conditions worsening towards the end of last year.

The business’s gross profits fell 8.9 per cent to £237.3m year on year in the final three months of 2023, with the company noting that uncertainty among hirers and the approaching year-end salary reviews and bonuses made trading particularly challenging in the quarter.

The UK was its worst-performing region, with gross profits slumping 19.9 per cent, while it said conditions also worsened across Europe.

PageGroup signalled that wage growth is starting to ease back, saying “offers made to candidates are not as elevated as they were in 2022”.

Chief executive Nicholas Kirk said: “Despite the year-on-year decline in gross profit, we are still seeing good activity levels, albeit we did see a deterioration in job flow through the fourth quarter.

“However, these activity levels are not all converting into gross profit due to ongoing lower levels of candidate and client confidence.”

He said the group’s costs are “under continuous review and can be adjusted rapidly to match market conditions”.

Last week, Hays and Robert Walters both said they were cutting roles as job markets weakened, with Hays warning that profits would be lower than forecast and expectations for trading to remain challenging.

PageGroup said that in the UK, which accounts for 12 per cent of group fee income, its workforce fell by 79 to 1,164 during the fourth quarter.

“We continued to see clients deferring hiring decisions and candidates becoming increasingly cautious about accepting offers,” it said.

In the UK, gross profits tumbled 23 per cent across Michael Page and were 15 per cent lower at Page Personnel.

Robert Walters told shareholders last week it had been impacted by “continued challenging macro-economic conditions across many” of its markets.

Many firms have sharply reduced their hiring activity in recent months following increases to interest rates and wage inflation.

Hays confirmed earlier this month that it cut its workforce by around 600 roles worldwide to reduce costs due to the slowdown.

Robert Walters said its net fee income dropped by 13 per cent to £91.4m across the group over the final three months of 2023, compared with the same period last year.

It saw income drop 15 per cent in Asia-Pacific, the company’s largest market, with a stronger performance in Japan helping to offset weakness in other markets.