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Hays warns of a decline in profits: cars and jobs massively affected!
Recruiter Hays warns on June 19, 2025 of declines in profits in Germany and the EMEA region due to a weak labor market.
Hays warns of a decline in profits: cars and jobs massively affected!
Hays, the major UK recruitment firm, today warned of a fall in annual profits due to the weak global labor market. A drop of over 13% in shares of Hays followed this warning, which was announced on Thursday morning. The decline in activity was mainly caused by weak permanent recruitment worldwide. These decreased numbers reflect low customer and candidate confidence, weighed down by macroeconomic uncertainties.
In Germany, Hays' largest market, the situation in the automotive sector has had a negative impact on recruiting activities. German automakers have slowed their hiring, particularly in light of the threat of higher US tariffs of up to 25% on exports to the US. Hays expects fees to fall by 5% in Germany and 13% for permanent recruitment in the UK and Ireland.
Economic challenges and adjustments
Economic conditions in Western Europe have worsened. Hays says the uncertainties caused by US trade policy and conflicts in the Middle East are preventing many companies from hiring new employees. In Germany, this led to lower permanent and temporary recruitment, leading Hays to significantly reduce the number of employees.
According to an analysis by Financial Analyst Hays recorded a 12% year-over-year decline in group net fees during the second quarter. Permanent recruitment was particularly affected, falling by 19%. The UK and Ireland region saw net fees fall by 14%, while temporary recruitment fell by 11%.
Outlook and strategic realignment
Hays forecast an operating profit of around £45 million for the year to the end of June, compared with previously forecast £56.4 million. The “challenging market conditions” are expected to continue into the new financial year. The company focuses on improving fee income and efficiency. Structural cost reductions of £30 million per year are targeted by the 2027 financial year.
Additionally, Hays will make concerted efforts to shift its business mix towards higher growth sectors and large enterprise customers. While RBC analysts have recognized Hays' long-term potential, they have tempered their expectations for short-term returns, meaning no special dividends are expected for the 2025 or 2026 financial years.