International recruiter Robert Walters has blamed the “longer than expected” rebasing in job market conditions for a decline in profit in the second quarter.
Gross profit at the FTSE Small Cap recruitment firm, which operates in the Asia Pacific, continental Europe and the UK, slid by 18 per cent in the six months ended June 30.
Gross profit, defined as net fee income, dropped from £202m in the first half of last year to £166.1 on a reported basis. On a constant currency basis, gross profit dropped 14 per cent.
The decline was particularly pronounced in the firm’s Asia Pacific division. Profit at this arm dropped by a fifth from £87m in 2023 on a reported basis.
The firm said June was the worst year of the month so far for fee income. Fees for the month dropped 18 per cent. Robert Walters said new job flow in the month was “weaker than expected.”
The results from Robert Walters are yet another sign of the slowdown in the international jobs market affecting recruiters, who are widely regarded as a canary in the coal mine for the health of the wider economy.
Last week, rival recruiter Page Group issued a profit warning alongside its second-quarter results, and Hays’ slashed its earnings outlook due to what it called “global uncertainties”.
Robert Walters announced a hefty round of layoffs in January when it cut 220 jobs in reaction to “continued challenging macroeconomic conditions”.
Toby Fowlston, CEO at Robert Walters, said: “Fee income for the first half of 2024 continued to reflect the rebasing in market conditions relative to the post-pandemic peak.
“This period of market adjustment is now longer in duration than previously expected, with macroeconomic turbulence and political uncertainty restraining client and candidate confidence in certain geographies.
“Though current market conditions suggest a wider range of potential outcomes for the full-year than seen historically, I have high confidence in our experienced leadership team, which has successfully navigated many challenging market cycles.
“We are committed to our medium-term plan to further strengthen the business, details of which will be shared at our capital markets event in September.”