Hays Warns of Uncertain Job Market as AI Transforms Work
The recruitment firm reported its first annual loss in 23 years, citing unprecedented global changes driven by technology.
Recruitment firm Hays has issued a warning about a "significantly uncertain" job outlook, attributing the shift to the accelerating impact of artificial intelligence. The company reported its first annual loss in 23 years, with its fees declining by 8 percent.
Hays stated it is navigating global changes at an unprecedented scale and pace as technological developments reshape the world of work. The firm noted that expectations from companies seeking to recruit are also rising, with rapidly evolving skill needs and a growing demand for flexible, project-based, and specialist work.
According to a report by Goldman Sachs, junior white-collar workers are among those most affected as industries like management consulting, advertising, and software publishing increasingly adopt AI instead of hiring entry-level staff. Financial institutions in London and New York are investing heavily in AI, and customer service operations are turning to automated systems.
"We’ve been through downturns before, but this time is different," Hays said in its statement. "The future is significantly uncertain, shaped by the potential impact of AI on jobs, disintermediation by technology platforms, increased macroeconomic uncertainty and threats from deglobalisation."
The company reported a loss of £54.5 million for the 12 months ending June 30, a stark contrast to a profit of £1.5 million the previous year. To address more challenging global hiring conditions, Hays implemented cost-cutting measures, achieving its savings targets three years ahead of schedule by reducing annual costs by approximately £50 million. An additional £50 million in savings is planned for the next fiscal year. The firm's consultant workforce was reduced by 12 percent year-on-year by the end of the 2025-26 period.
In June, Hays confirmed the sale of operations in six European countries and outlined plans to review businesses in another seven international markets as part of its restructuring efforts. Despite the full-year loss, the company returned to profitability on an underlying basis in the latter half of the fiscal year, with adjusted operating profits increasing by 3 percent.