London-listed recruitment firm SThree has posted a drop in fees amid a “challenging backdrop” and mass global layoffs across the technology industry.
The STEM-specialist recruiter reported a seven per cent drop in net fees to £188.7m for the six months ending on 31 May 2024 compared to a “strong prior year performance”. It pinned the decline on “continued softness in new business across contract and permanent”.
The drop in fees was most pronounced in the US and DACH region, which comprises Germany, Austria, and Switzerland. SThree said its performance in life sciences and tech continued to “reflect ongoing market conditions and record comparatives for technology.”
The firm’s contractor order book ticked down two per cent year on year to £182m, which it said represented “sector-leading visibility” equivalent to around four months of net fees.
The tech sector has seen a wave of layoffs since last year as firms look to cut costs and boost investor returns. Nearly 100,000 employees have been laid off by more than 300 companies so far this year, according to online tracker layoffs.fyi.
Analysts generally agree that the layoffs are likely to continue for now. However, a more positive sign for the industry is that the pace of layoffs has slowed compared to the same period last year.
SThree itself has shed jobs, with the firm saying on Tuesday that its headcount at the end of the half-year was “down slightly” from six months before.
Still, SThree said it continued to see strong demand for engineering roles, with record net fees for that segment driven mainly by energy. Renewables remained its fastest-growing segment, up 15 per cent on the year before, the company said.
Chief executive Timo Lehne said the firm was “well placed to take full advantage when the market returns”.
“Against the challenges experienced by the sector, we are pleased with our trading performance over the past six months, with strong contract extensions partially offsetting continued soft new business activity,” he added.
“Following our successful launch in the US, our deployment in Germany is well underway. We are excited about the significant enhancements this will bring across our group over the mid-to-long term, positioning us at the forefront of our industry.”
SThree said it expected its performance for the full year to be in line with market expectations.