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Randstad, the world’s largest staffing firm, revealed concerns about a tepid job market. It exceeded profit expectations for the third quarter through effective cost-cutting.
Randstad Job Market Unemployment Creeping Up
Randstad, a powerhouse in the recruitment sector, along with its peers, points to a subdued jobs market and companies’ reluctance to hire. Sander van‘t Noordende, the CEO of this Dutch-based group, reported a gradual increase in unemployment, ranging from 10 to 20 basis points in certain countries, accompanied by a decrease in job vacancies.
Global Labor Market Concerns
This observation aligns with trends already seen in the sector. For example, the UK’s Recruitment and Employment Confederation (REC) stated that, on October 11, employers reduced job vacancies for the first time in over 2-1/2 years during September.
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Beating Profit Expectations
Despite challenges in the labor market, Randstad managed to outperform, reporting underlying earnings before interest, tax, and amortization (EBITA) at 273 million euros ($291.5 million). This figure exceeded the expected 258 million, as per a company-conducted poll. The achievement is attributed to efficient expense management and pricing strategies, as stated by the company’s finance chief, Jorge Vazquez.
Revenue Decline
In contrast, the group’s revenue for the quarter saw a 7% decrease to 6.26 billion euros, a result described by KBC analysts as “significantly more down than expected.” Additionally, concerns arose among analysts regarding revenue trends for the remainder of the year.
Resilient Sectors
Some sectors, such as automotive in the Netherlands, France, and Germany, along with public health and education, displayed resilience. However, the CEO noted challenges in most other areas.
Addressing the issue of employees returning to offices, van‘t Noordende cited research indicating that those working in a hybrid model demonstrated nearly equal productivity to those working solely from the office.
Randstad’s shares experienced a 0.2% decline, reaching 47.70 euros by 0844 GMT, with a temporary low of 46.06 euros, the lowest in almost five months.
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