Two British recruitment giants have shed more than 780 jobs and slashed a fifth of their costs in recent months, as the coronavirus has hammered hiring activity across the globe.
PageGroup and Robert Walters both reported sharp drops in gross profit on Wednesday (8 July), with recruitment drying up in the three months to the end of June. Both have operations worldwide.
At PageGroup (PAGE.L) profits slid by 47.4% in its second quarter year-on-year to £118.3m ($149.5m). It confirmed its staff numbers had dropped by 255 in April and a further 326 in May and June, with its fee-earning recruiters dropping mainly in the UK and Americas.
PageGroup said most of its cuts to fee-earning staff had affected “inexperienced” recent joiners and staff on performance review. But it said it was still “selectively hiring experience fee earners from the competition at all levels,” and had received unprecedented application numbers.
“Whilst it is always regrettable to let any people go, we have chosen not to make wholesale changes and to retain our proven fee earners,” said Steve Ingham, CEO of PageGroup.
The companies both said they had sought to drastically bring down costs. PageGroup has slashed its costs by around 21% over the past three months. It highlighted voluntary salary cuts, staff working four-day weeks, use of government support such as the furlough scheme, slashed entertainment and travel spending and other “sacrifices” by staff.
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Rober Walters also highlighted a 19% cut to costs, including through 20% pay cuts to executive directors, voluntary reduced working hour schemes and discretionary spending cuts.
"Given the fluid and volatile nature of the global pandemic including the inherent risk of infection spikes and localised lockdowns, our forward visibility remains limited,” said its eponymous founder.
Shares in both companies were trading higher on Thursday after the updates, suggesting the sharp gross profit declines or outlook reported were still less severe than feared by investors.