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Adecco sees signs of a hiring slowdown at start of 2023

by Staff GBAF Publications Ltd
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By John Revill

ZURICH (Reuters) -Adecco said its hiring activity had weakened modestly at the start of 2023 after the staffing company reported weaker-than-expected earnings during its fourth quarter.

The Swiss company, which provides temporary and permanent workers for industries ranging from manufacturing to tech consultancies and finance, said its revenues had increased by 6% in December, but volume growth had declined in January.

“We have seen a slowdown between December and January, but it is modest,” Chief Financial Officer Coram Williams told Reuters, declining to give a figure.

“The business is still growing…we are gaining market share. There is more macro economic uncertainty out there, but the talent market is very dynamic.”

Adecco shares traded 2.6% lower after the results.

The fortunes of Adecco and rivals like Randstad and ManpowerGroup are seen as a bellwethers for the broader economy as employers brace for a looming recession.

Adecco Chief Executive Denis Machuel said parts of the world were still growing strongly, while others were scaling back hiring.

“We see excellent growth in Latin America and Asia Pacific, but it’s true there’s been a modest slowdown in Europe and the U.S,” he told Reuters.

“We see growth in some parts of Europe, like Switzerland and Germany but slowdowns in some other countries.”

Machuel said he expected workers’ wages to continue to rise this year, because of shortages and imbalances in the labour market.

“The talent scarcity is here to last, and that can fuel wage inflation,” he said.

During the three months to the end of December Adecco’s revenue increased by a reported 13% to 6.2 billion euros ($6.6 billion), beating the 6.1 billion euros expected in a company gathered consensus of forecasts.

When adjusted for trading days, currencies and acquisitions, the increase was 5%.

But net profit fell 65% to 65 million euros, missing forecasts as the company expanded its own workforce by 14% to 39,364 people and incurred interest and other expenses.

($1 = 0.9439 euros)

(Reporting by John RevillEditing by Paul Carrel and Keith Weir)