SThree saw a significant drop in first-quarter fees amid a subdued macroeconomic backdrop and large-scale layoffs within the technology sector.
The STEM-specialist recruiter revealed net fees declined by 6 per cent year-on-year to £93.7million between the beginning of December and 29 February.
Trading in the US and Germany, two of the firm’s five biggest markets, was impacted by weak tech-related recruitment, while the former territory was also hit by falling demand for life sciences roles.
Challenging: STEM-specialist recruiter SThree saw a significant drop in first-quarter fees amid a subdued macroeconomic backdrop and large-scale layoffs within the technology sector
Tech companies have continued axing jobs in significant numbers this year as high interest rates have elevated borrowing costs and people spend more time outdoors due to the absence of pandemic restrictions.
Paypal, Amazon, Microsoft, Google owner Alphabet, and video game developer Electronic Arts are just some of the prominent names that have announced cuts since January.
Just over 50,000 tech industry redundancies have already been announced in 2024, following 263,180 losses the previous year, according to the website Layoffs.fyi.
Timo Lehne, chief executive of SThree, said the group achieved ‘a good performance against a strong comparative and within a market environment that remains difficult from a new business perspective.’
While tech sector recruitment remained shaky, SThree experienced solid demand for engineering jobs, particularly from the renewable energy industry.
Lehne added: ‘Whilst the sentiment we are reporting is much the same as the prior period, the strength of our contract extensions continues to be a particular highlight, demonstrating our clients’ need to retain critical STEM skills and flexible talent.’
Meanwhile, employment agency Staffline revealed it swung to an £11million loss last year from a £3.8million profit in 2022.
The Nottingham-based firm attributed the loss to impairment charges on the closure of a classroom-based training business at its PeoplePlus subsidiary.
Yet Staffline said it achieved a ‘robust performance,’ with total revenue tipping up by 1 per cent to £938.2million, thanks heavily to market share gains at its British recruitment division.
The segment won or renewed contracts with the likes of supermarket giants Tesco, Morrisons, and Marks & Spencer, as well as food manufacturer Bakkavor and wine retailer Laithwaites.
Albert Ellis, chief executive of Staffline, said the result proved the ‘resilience of the group’s operating model against a challenging macro-economic backdrop and also the success of our strategy.’
Staffline Group shares were 3.7 per cent down at 26p during late Tuesday afternoon, while SThree shares were 2.1 per cent lower at 415p.
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