Hays Slashes Dividend Amid Recruitment Market Slump And Sees No Imminent Recovery

Britain’s largest listed recruiter Hays has slashed its dividend and announced further workforce reductions as the firm grapples with a severe 90 per cent drop in profits. The beleaguered recruitment group, which also unveiled a fresh wave of cost cutting, blamed persistent economic and political uncertainty for undermining corporate hiring appetite and discouraging workers from moving roles.

The firm, with headquarters in London and offices spanning 31 countries, highlighted an unprecedented downturn in the recruitment market that has stretched for nearly three years. This tough environment—marked by trade tensions, elevated interest rates, and volatile inflation—has battered both company confidence and worker mobility. This climate, coupled with numerous global elections, has seen many employers delay or even cancel their hiring plans altogether, with full-time positions suffering more than contractor demand.

Hays’ net fee income for the year to June fell 13 per cent to £972.4 million, down from £1.11 billion the previous year. Pre-tax profit sank to just £1.5 million, compared with £14.7 million a year ago—a dramatic fall from the £200 million posted in 2022. In response to the protracted hiring slowdown, management has cut the annual cost base by £35 million and aims to realise another £45 million in annual savings by 2029. The current workforce stands at 9,500, down from 11,000 last year and a peak of 13,500 in 2022.

Reflecting the weak results and cautious outlook, Hays’ shares dropped 3.9 per cent to 61 pence in Thursday morning trading, extending a slide that leaves the stock near its lowest since 2012 and down by a third over the past year. The company’s final dividend, to be paid in November, has been sharply cut by 86 per cent to 0.29 pence per share from 2.05 pence previously.

Chief executive Dirk Hahn remarked that the downturn is a global phenomenon, noting double-digit declines in fee income across all territories, including Germany, UK and Ireland, Australia and New Zealand, and other international operations. While some short-lived signs of recovery were seen earlier in the year, events such as new geopolitical tensions have quickly dampened optimism.

Hays remains focused on adapting to changing market conditions, committing to further cost efficiencies in anticipation that the subdued trading environment could persist. The company has positioned itself for an eventual upturn but remains vigilant against further setbacks.