Recruitment giant Hays has warned over further cuts to its workforce as it revealed annual profits plunged by nearly two-thirds after the Covid-19 crisis hit hiring worldwide.
The group saw its consultant workforce fall by 11% to 6,900 at its June 30 year-end, with a 6% fall in the UK and Ireland, and said a small further drop was expected in the three months to the end of September.
But the group is expecting most of this to come from leavers not being replaced and natural staff turnover.
It came as Hays reported a 63% fall in pre-tax profits to £86.3 million for the year to June 30 after fees tumbled 11%.
In the UK and Ireland, operating profits slumped 66%, with the pandemic following hot on the heels of a difficult end to 2019 amid Brexit uncertainty and the general election.
But the group said the recruitment market had begun to recover, with fees stable since May as lockdown restrictions have eased.
It said it was seeing “modest” signs of a bounce-back in the permanent recruitment market, with temporary hiring stable.
Hays has also now opened around 80% of its offices.
Alistair Cox, chief executive of Hays, said: “The pandemic severely impacted all our markets globally.”
He added: “Overall, we have protected our business, while taking actions to appropriately reduce costs.”
The group said it had reduced its cost base by around a fifth since the pandemic struck.
But it is also investing in boosting staff and capabilities across growth areas, with more than 20 projects being earmarked.
Mr Cox said technology was a sector that was “ripe” for further growth, with the pandemic accelerating IT trends, while large corporate accounts is another growth market.
Technology and life sciences were the two private sector jobs markets that remained largely robust throughout the lockdown, according to the group.
Across the UK, Hays said all regions were impacted by the crisis, but that the London jobs market was slightly more resilient, with fees down 10%.
The East and North West suffered some of the biggest fee drops, down 27% and 19% respectively, with Ireland down by 26%.
It said IT fees grew by a “solid” 4% over the year in the UK and Ireland.
Hays has a total workforce, including consultants, of around 10,400 worldwide across 266 offices in 33 countries.