PageGroup slashes jobs as recruitment squeeze wipes a third off UK profits

Tom Belger
·Finance and policy reporter
Commuters getting on a Jubilee Line Underground train at Canning Town station during the morning rush hour in London, as England's third national lockdown to curb the spread of coronavirus continues.
PageGroup saw its profits take a hit as recruitment fell in Britain. Photo: PA.

Recruitment firm PageGroup (PAGE.L) saw its profits slump by more than a third in the UK in the last three months of 2020, as the coronavirus crisis continued to hammer the labour market.

Gross profits across the group’s worldwide operations slid by 20.2% year-on-year to £165.5m ($226.5m), with the UK recording the biggest slump of the countries and regions reported in its latest trading update. Shares in the firm slid on the announcement, down 0.8% in early trading in London.

The recruiter continued to axe fee-earning recruiter jobs in the final quarter, losing another 78 and taking its 2020 tally of job losses to 882 roles, or 15% of its workforce.

The number is a net figure, with actual job losses much higher but offset by the hiring of around 400 “experienced fee earners.” The company said leavers had been “recent joiners or those on performance review.”

Recruitment of permanent hires has dried up more significantly than temporary hires, falling by almost a third across 2020 amid employer cost-cutting and uncertainty.

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Profits slid 34.2% in the UK in the fourth quarter to £21m ($28.8m), and some 40.1% in its full-year for 2020.

The UK team saw a greater hit than other markets, with the average decline for Europe, the Middle East and Africa standing at 18.6%. France, Germany, and China were among those with much lower hits to earnings.

The US came close with a 31% fall, however. Across the group the final quarter and final month of the year saw the pandemic’s toll ease slightly, however, compared to its third quarter results. By December profits were down only 18.2%.

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CEO Steve Ingham said: “The group's results improved in each of the three months of Q4, which continued the monthly sequential improvement since May. This performance was achieved despite the background of continued and increasing restrictions or lockdowns in many of our markets.”

He added: “As we enter 2021, there remains a high degree of global macro-economic uncertainty in many of our markets, as COVID-19 remains a significant global issue and lockdowns have returned in a number of the group's markets.

“However, in the UK we are encouraged that the Brexit deal has provided a degree of clarity.”

It comes as UK chancellor Rishi Sunak gave a gloomy update to MPs about the economy this week with Britain back in lockdown.

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He told parliament on Monday: “Even with the significant economic support we have provided, more than 800,000 people have lost their jobs since February.

“While the new national restrictions are necessary to control the spread of the virus, they will have a further significant economic impact. We should expect the economy to get worse before it gets better.”