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Shares in specialist recruitment firms and other London-listed headhunter firms fell on Thursday as S3 warned it expected a sharp fall in profits next year, raising concerns about a slowdown in the recruitment market.
Science, technology, engineering and mathematics staffing company SThree said it expected pre-tax profits to be around £25m next year, far below the £66.6m expected by analysts. Analysts expect the group to announce a profit of £67.4m for the year ending 30 November 2024.
SThree’s warning comes at a challenging time for recruiters, with international companies cutting jobs and delaying hiring decisions amid growing geopolitical uncertainty and challenging economic conditions. It’s a thing.
Shares in S3 fell as much as 36% in early trading in London to around 2.31 pounds, the lowest since 2020, and were down 24% by mid-morning. This negative update also affected the stock prices of other recruitment companies, with Hayes’ share price falling by 5% and Page Group’s share price falling by 3%.
SThree, which sends workers to countries across Europe, the Netherlands, the US and the UK, announced a 9% fall in net fees to £369m in the year to 30 November. Of this, commissions for permanent employment fell by almost a fifth, while commissions for contract employment fell by 7%. percent.
He said that “political and macroeconomic uncertainty” has increased, particularly in Europe, causing delays in corporate decision-making and sluggish business activity.
“The expected easing in market conditions has not yet materialized,” Chief Executive Timo Rehne said, adding that the company was taking a “cautious view” on the 2025 financial year as a result. Ta.
The warning comes as British businesses face rising costs due to increases in national insurance contributions for employers announced in Chancellor Rachel Reeves’ Budget in October.
On Tuesday, job site Indeed said employment in the UK had fallen more sharply than in other large economies over the past year, with the number of jobs posted falling 13% from pre-pandemic levels and down from a year ago. It was announced that there was a 23% decrease compared to the previous year. This was a larger layoff than in other markets targeted, including the United States, France, Germany, Canada and Australia.
According to Indeed, the current hiring decline is deeper and longer lasting in technology, software development, and information design, a trend that could hurt Stem-focused recruiters like SThree. It is said to be expensive.
