Recruitment giant warns of ‘prohibitive’ cost of hiring staff as it axes quarter of UK workforce

Recruitment giant Robert Walters has warned the cost of hiring staff in the UK ‘can be prohibitive’ as unemployment races towards its highest level in over a decade.

As it reported annual losses of £19.6million, the company revealed it shed nearly a quarter of its British workforce last year, though it did not put a number on the job losses.

The firm swung the axe as a slowdown in hiring by UK firms – plagued by Labour’s tax hikes and rising cost – dented fees earned by its recruitment teams.

And Robert Walters said it would continue to make further ‘meaningful’ cost cuts this year.

The update will fuel fears of a mounting unemployment crisis in the UK just days after the British Chambers of Commerce warned the jobless rate will hit 5.5 per cent this year.

That would be the highest since 2015 while youth unemployment is set to soar to 17.1 per cent.

Robert Walters chief executive Toby Fowlston said the company has moved some basic head office jobs overseas to save money.

‘The cost of hiring in the UK can be prohibitive so we have made the decision to offshore some of our functional roles to places like Manila and India,’ he said.

However, Fowlston noted a pick up in business in the UK towards the end of last year, with a 5 per cent decline in fees in the first six months of 2025 followed by a 20 per cent increase in the second half.

He said there was strong demand for staff among the legal profession as well as in technology, accounting and finance. 

‘Momentum built as the year progressed,’ he said, adding that the candidates it places in the UK earn a typical salary of £71,000, rising to over £85,000 in London.

Businesses in the UK have been battered by higher taxes under Labour, including the £25billion national insurance raid, as well as sharp increases to the minimum wage and other costs.

Unemployment has jumped from 4.1 per cent when Labour came to power to a five-year high of 5.2 per cent while youth unemployment is at an 11-year high of 16.1 per cent.

The UK job losses at Robert Walters came as the firm slimmed down its workforce worldwide with global staff numbers down 15 per cent last year.

In a statement to the stock market, the firm said: ‘The overall backdrop for hiring markets globally remains volatile.

‘As such, the cautious client and candidate sentiment observed in 2025 is expected to remain a factor in 2026.

‘The board’s planning assumption therefore remains for 2026 group net fees to be slightly below 2025.’

The comments came as the firm posted losses of £19.6million for 2025 having made profits of £500,000 the previous year.

Net fees slumped 15 per cent to £274.2million.

And in a blow to shareholders, the company said it would not be paying a dividend, having handed out 23.5p a share for 2024.

Robert Walters said it was ‘mindful of the importance of a strong balance sheet position as well as the overall still volatile macro backdrop’.

Fowlston said 2025 was ‘a third challenging year for global hiring markets, with client and candidate sentiment still cautious given the considerable macro and geopolitical volatility of the first half of the 2020s’.

He added: ‘The resultant decline in group net fees, over half of which was offset through cost actions, resulted in a loss for the year.

‘The financial result, which includes restructuring costs, is unsatisfactory to everyone at Robert Walters – but 2025 was not defined by it.

‘In the face of the challenging conditions, we continued to implement self-help measures, focused on ensuring a robust balance sheet and moved to further position the business to address the significant long-term market opportunity.’

He said artificial intelligence is also re-shaping the world of work.

Fowlston said: ‘Though the advent and adoption of AI brings the prospect of further accelerating the speed of change in how work is done, and in how hiring is done, we continue to believe this will present opportunities for our business.’