July 9, 2020 / 9:39 AM / a month ago

British recruiters' income falters as pandemic stifles hiring

(Reuters) - British recruiter PageGroup (PAGE.L) said on Thursday it hoped a coronavirus-driven slump in hiring activity would soon taper off after it cut more staff in May and June to help it survive the industry’s biggest crisis in a decade.

FILE PHOTO: A commuter is seen on a London Underground train, following the outbreak of the coronavirus disease (COVID-19), London, Britain, May 13, 2020. REUTERS/Henry Nicholls/File Photo

The company, which owns brands such as Page Executive and Michael Page, reported a 48% decline in net fee income to 118.3 million pounds ($149.53 million) for the second quarter as companies put hiring on ice during lockdowns.

Smaller peer Robert Walters (RWA.L) also reported a drop in income, falling by one-third to 71.1 million pounds in the second quarter and added it was performing in line with market forecasts for the year.

Shares in PageGroup and Robert Walters were up 0.7% and 4.8% respectively at 0822 GMT.

The recruitment firms, which have already scrapped dividends and cut costs, also reduced the number of consultants they employ in response to the downturn.

PageGroup has laid off a further 326 employees in the last two months, adding to the 255 it announced in April, while Robert Walters said headcount at the end of the quarter had dropped 5% from the end of March.

“Having weathered a particularly challenging Q2, we now look forward to driving improved activity and gross profit through the second half,” said PageGroup CEO Steve Ingham.

Most global recruiters have been battening down the hatches for months in expectation of a collapse in revenue due to the crisis, analysts and industry players have warned steeper staffing cuts looked unavoidable.

A “jobs crisis” is underway in Britain, according to a survey from the Recruitment and Employment Confederation industry body on Wednesday, adding the collapse in the labour market had eased only slightly in June.

The recruiters’ quarterly trading updates also showed a marked slowdown in UK performance, with Robert Walters adding that London was performing worse than other UK regions.

PageGroup and Robert Walters both have operations in more than 30 countries globally.

Reporting by Indranil Sarkar and Yadarisa Shabong in Bengaluru, Editing by Sherry Jacob-Phillips, Anil D'Silva and David Evans

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