SThree's net fees fall as Europe reins in recruitment (updated)
UPDATE 2-SThree's net fees fall as Europe reins in recruitment Writes through with details on European and U.S. markets, CEO comment, shares and context
June 16 (Reuters) - Britain's SThree STEMS.L reported a decline in first-half net fees on Tuesday as European companies cut back on hiring amid weak growth and a push for AI-driven efficiencies, weighing on Germany and the Netherlands while U.S. demand stayed strong.
The slowdown reflects a cautious approach by employers reassessing staffing needs as they seek cost savings and productivity gains from artificial intelligence, with hiring also clouded by geopolitical tensions linked to the Iran war.
Still, SThree, which specialises in science, technology, engineering and mathematics roles, stuck to its fiscal 2026 outlook, forecasting pretax profit of about £10 million ($13.4 million) and striking a note of "cautious optimism".
"As the workforce needs of our clients continue to evolve, they increasingly seek partners capable of managing greater complexity in workforce solutions," CEO Timo Lehne said in a statement, adding that trading momentum had improved despite challenges.
SLOWER DECLINE
The London-listed group's shares handed back early gains. They have lost more than 10% so far this year.
SThree reported a 7% drop in net fees to £147.7 million for the six months ended May 31, an improvement on the 8% and 12% declines in the first quarter and in fiscal 2025, respectively.
Net fees fell 14% in Germany and 24% in the Netherlands, while the U.S. business grew 12%. Euro zone economic activity contracted at its fastest pace in more than two-and-a-half years in May, while the U.S. economy continued to add jobs.
Rival recruiter HAYS.L has also reported falling net fees, citing weakness in Germany, while Robert Walters RWA.L and PageGroup PAGE.L posted group-level declines in April.
($1 = £0.7458)
(Reporting by Neeshita Beura in Bengaluru. Writing by Pushkala Aripaka. Editing by Eileen Soreng and Mark Potter)