Profits at recruitment giant Hays more than halved in the latter period of last year, as companies across the UK and Europe put the brakes on hiring.

The London-based company blamed “considerable headwinds from economic conditions”, as operating profit fell to £26 million, down 56% versus the same period in 2023.

Meanwhile, it closed 15 of its UK and Irish offices during the calendar year, and slashed the number of consultants by more than 1,100, including about 300 roles in the UK and Ireland.

Headcount has fallen by about 2,700 over the last two years, and stood at about 6,800 at the end of 2024.

Hays is among the biggest recruitment agencies in Europe, and its fortunes are closely tied to the market for office-based jobs in the UK, Germany, France and others.

It mainly hires for companies in the accountancy and technology sectors, among others.

But amid a swathe of elections across western Europe, and worsening economic conditions across much of the continent, hiring has slowed significantly.

Hays said: “Economic and political uncertainty weighed on client and candidate confidence driving lower placement volumes and a material lengthening of our ‘time-to-hire’.”

Fees across the group, which it brings in for hiring on behalf of clients, slumped 13% over the six months to December 31, compared to the year before.

In the UK and Ireland, it saw a 17% drop in fees.

The company also has offices in Australia, Japan and the US, among others.

Chief executive Dirk Hahn said the company faces “considerable headwinds from economic conditions” and called it a “challenging period”.

He added: “Our key markets are being driven by powerful, supportive megatrends and remain characterised by significant talent shortages, which we help solve for our clients.

“When client and candidate confidence improves and the cycle recovers, I am confident we will deliver a healthy drop-through of net fees to operating profit.”

Hays said it had made cost cuts equivalent to about £25 million per year over the six-month period through “operational restructuring and back office efficiency programmes”.

It comes after a swathe of large corporates in the UK criticised recent Government policy of raising taxes for companies.

Labour increased employer national insurance contributions in its October Budget, in a move designed to raise more money in taxes to spend on improvements to public services like the NHS.

But companies have criticised the plans for making it more expensive to hire people.

Adam Vettese, an analyst at the finance firm eToro, said “low confidence and political uncertainty will have undoubtedly contributed” to Hays’ drop in profit.

“Recruitment firms have had to batten down the hatches and being a market leader, Hays has been able to implement a wave of cost-cutting measures in order to weather the storm,” he added.

“Smaller firms in the space have not been so fortunate.”