Britain was just given a huge sign that there could be a disaster in the jobs market, thanks to Brexit — PageGroup, one of the UK’s biggest recruitment agencies, is cutting staff in the UK.
The company announced in its first-half report on Thursday that it reduced its recount in the UK by 3%, from 1,516 to 1,466 at the end of June.
PageGroup, formerly known as Michael Page, blamed “tougher trading conditions” as a result of “uncertainty impacting clients’ decision-making in the lead up to the EU Referendum.” PageGroup’s gross profit in the UK fell by 1.6% in the first 6 months of 2016 and operating profit tanked by 7.1%.
It may be a rough measure, but this is surely yet another sign that the UK’s shock decision to leave the European Union is going to be hell for jobs.
Almost all major investment banks and economic think tanks have said that Britain is now heading for some sort of recession in the wake of the Brexit vote. Meanwhile, Bank of England’s agents — emissaries who speak to businesses across the country — reported on Wednesday that: “Overall, respondents expected a negative effect from the vote on turnover, capital spending and hiring activity over the next twelve months.”
PageGroup says “it is too early to say how the result will impact our results going forward,” but its financial performance isn’t necessarily linked to hiring.
The company highlights the fact that in 2009 “gross profit fell 37%, but despite this we still generated over £10m of Operating Profit.”
In other words, belt-tightening helped its results.
The company flags “ongoing macro-economic uncertainty in the UK.” And if it is uncertainty that hit hiring in the run-up to the referendum then it is unlikely to have a different effect now.
Furthermore, it looks like the uncertainty is likely to continue for years, as Britain is still yet to trigger Article 50, which starts the 2 year process of exit negotiations. Even the former Danish minister who has first-hand experience of negotiating a country’s exit from the European Union has warned that a Brexit is an “enormous” challenge will take “much longer” than three years.
Get ready for a jobs squeeze.
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