Robert Walters warned that its profits would be “significantly” lower than expected this year, which led to a steep fall in the value of its stock and those of its competitors.
At the end of the last year, signs were beginning to appear that the recruitment market would slow down after two years of furious hiring.
Companies have been delaying new hires in recent years, particularly for permanent positions, and candidates are more reluctant to change jobs for fear of losing their job if trading conditions worsen.
Robert Walters reported today that it had a 9 percent lower income for April and May than the same period last year.
The slowdown was attributed to “reduced candidate confidence” and the lengthening of time for hiring. It is likely that profits for the year ending 31 December 2020 will be lower than market expectations.
City analysts had predicted that Robert Walters’ profit would be around £51 million in this year. Kean Marden is an analyst for Jefferies who suggested that the “estimates” could be halved as a result of the update.
Robert Walters’ shares dropped 62 1/2p or 13.4 percent to 403 1/2p. PageGroup fell 30 1/4p or 6.8 percent to 412p. Hays also declined 7p or 6.3 percent to 102p.
Robert Walters founded his company, Robert Walters & Co., in 1985. He stepped down from the position of chief executive in April. The group’s profits are now 84 percent overseas. At the time of founding, almost all his clients were located in the UK.
Robert Walters People and Resource Solutions, a group of 4,400 recruiters, specializes in the placement of people in the fields such as finance, engineering and legal jobs, marketing, and technology.
In recent months, thousands of tech workers have been laid off, including at meta, Amazon, and Google.
Robert Walters’ fortunes have taken a sharp turn. was in high demand up until last fall.
The company expected that trading would pick up soon. This has not happened. Yesterday’s statement stated that “Contrary the expectations of the board, [confidence levels] and time to hire] have not shown sustained improvement.”
There is still a shortage in white-collar jobs and wage inflation remains “solid”. Toby Fowlston is the new Robert Walters CEO and he has expressed confidence that “there will be a return of meaningful growth”.
The company has decided to buck the trend and keep its consultants in place, despite the fact that it is expecting a recovery.