SThree is closing a handful of offices in the UK and Europe, and trimming its support staff, as part of a restructuring that the white-collar recruiter said will save £8m a year.
The cost-cutting measures come a month after SThree said companies’ unwillingness to hire permanent staff in Europe had helped drag down gross profit by 6 per cent year on year to £94m in the six months ending May 26.
“We’ll be looking at any savings on an ongoing basis, whether it’s a good market or a bad market,” said Gary Elden, chief executive.
SThree said the office closures and cut of 50 support services staff would save the recruiter £3m in the second half of this year, and £8m a year from 2014.
On Monday the recruiter – which fills jobs across industries such as IT, finance, energy and pharmaceuticals – said its pre-tax profit in the period declined from £9.3m a year earlier to £6.7m.
Mr Elden said SThree would continue to try to increase the fees it generated from contract placements, which are generally more resilient than permanent placements in an economic downturn, but while still raising permanent placement fees.
“We need to hold our ground on permanent [hiring] to take into account if there is a pick-up in the market. That balance has got to be right,” said Mr Elden.
Sebastien Jantet, an analyst at Investec, said SThree’s push to focus more on contract fees, expand abroad and diversify the sectors in which it placed candidates was “a little more disruptive than expected” in the past few months but that SThree’s restructuring plans would protect its profitability from next year.
SThree said its interim dividend was unchanged from the same period last year, at 4.7p per share.
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