Recruiter PageGroup has said the jobs market remains “tough but stable” in the UK as it continues to slash costs to offset difficult trading.
The firm saw UK gross profit drop 5.3% in the three months to the end of June, which was an improvement on the 11.4% tumble seen in the previous three months.
On the UK outlook, it said: “The market remains tough but stable, with pockets of optimism beginning to appear.”
Technology recruiting and its Page Executive offering are among areas seeing signs of improved trading, it added.
Group-wide gross profits fell 0.2% on a constant currency basis to £197.6 million in the quarter, but it said around half of the group was now seeing growth worldwide, with southern Europe returning to growth.
Shares in the firm shot up by more than 15% as investors hoped the worst of the job market troubles were over, with Hays on Friday also having given the sector a boost with news it is on track for profits at the top of guidance.
PageGroup continues to trim to costs in the face of the tough jobs market, cutting another 80 fee earners in the second quarter, down 1.6% year-on-year to 4,994, with non-fee earners down 2.3%.
The firm said it remains on track for annual earnings of around £28 million, which would be an improvement on the £20.9 million reported in 2025.
But it added a note of caution over the outlook.
Nicholas Kirk, chief executive of PageGroup, said: “Whilst we have seen improvement and signs of a normalisation in trading in a number of our markets, there remains a high degree of uncertainty in the outlook for the rest of the year.”
He added: “We have a flexible cost base through our fee earner headcount, which adjusts naturally to market conditions.
“Alongside this, we continue to control the cost base tightly and have undertaken various programmes since the launch of our new strategy to manage it in light of the tougher market conditions.”
Aside from reducing its fee earner workforce, actions include cutting support staff, closing offices and reducing management layers, which together have saved around £40 million each year.
“This cost base control has continued in 2026,” Mr Kirk said.
Dan Coatsworth, head of markets at AJ Bell, said: “It’s been an awful time to be a recruitment consultant in recent years as labour markets soften around the world.
“Businesses have delayed investment decisions, and the rise of AI has led to workforce cutbacks.”
“Last month, PageGroup’s shares hit a 23-year low as market pessimism engulfed the stock.
“The second quarter commentary has clearly helped to improve sentiment, but certain investors might need more convincing than just one solid trading update.”