Business News

Adecco says Brexit uncertainty hitting UK finance jobs

ZURICH (Reuters) - Speculation that Britain might vote to leave the European Union in a referendum next month is hitting demand for highly-skilled finance jobs in the country, the world's biggest staffing agency Adecco ADEN.S said on Tuesday.

The logo of Swiss staffing group Adecco is seen at a branch in Zurich, Switzerland March 9, 2016. REUTERS/Arnd Wiegmann

Uncertainty over the outcome of the June 23 referendum contributed to a 6 percent drop in revenues at Adecco’s professional staffing business in the UK and Ireland in the first three months of the year, the Swiss company said.

“We see growing uncertainty having a negative impact mainly in the recruitment of highly skilled people in finance,” Chief Executive Alain Dehaze told Reuters.

“In the normal, permanent recruitment, we don’t see any material impact.”

While Adecco filled fewer IT, finance and legal jobs in Britain last quarter, general staffing was up 12 percent.

Adecco made about 10 percent of its revenues in the UK and Ireland in the first quarter, and its exposure is set to rise.

In March it announced the acquisition of British recruitment firm Penna to boost its professional staffing business there.

Adecco said it expected to close the acquisition on Tuesday.

Group revenues rose 4 percent in underlying terms to 5.3 billion euros (4.2 billion pounds) in the first quarter, slightly ahead of analysts’ expectations in a Reuters poll.

Net profit fell 10 percent to 144 million euros as a higher tax rate, interest expenses and more public holidays took a chunk out of gross margins.

Adecco’s shares fell 2.3 percent in early trading .

The company confirmed its target for an earnings before interest, tax and amortisation (EBITA) margin of 4.5-5 percent through 2020. In the first quarter, the EBITA margin fell 30 basis points to 4.3 percent.

Reporting by Brenna Hughes Neghaiwi; Editing by Michael Shields and Mark Potter