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UPDATE 2-Recruiter Hays reports drop in fees, sees headcount falling this quarter

* Hays FY net fees fall 12%

* Sees more headcount reduction in Q1

* Shares down about 0.5% (Adds CEO comments, share move)

Aug 27 (Reuters) - Recruitment agency Hays Plc reported a 12% fall in full-year net fees on Thursday and said it expects its headcount to fall this quarter after a hiring slump driven by COVID-19 knocked fees by more than a third in the three months to June.

The company, which is among the world’s biggest recruiters with big businesses in both temporary and permanent hiring, said net fees slumped 34% in the fourth quarter of its 2020 fiscal year.

“Conditions in all regions were very tough,” Chief Executive Alistair Cox said, adding that there were signs of some resilience in technical sectors like information technology (IT) and life sciences.

The agency, which has already shed 9% of its global workforce, said it expected headcount at the end of the current quarter would also be down compared to the end of June.

“I think it’s fair to say that there will be small number of people who will choose to leave the organisation... and if they leave during the next few months we will think twice about whether we want to replace them,” Cox said in a call with Reuters.

“But that will be relatively low numbers. The vast majority of what was needed to be done has been done.”

The staffing company added that fees earned through May to July were stable and that it saw modest signs of improvement in its Permanent hiring, while Temporary markets remain stable.

Most corporate recruitment ground to a halt in March as companies froze hiring or laid off staff to cut costs as European and U.S. lockdowns followed those in Asia.

The onset of recession in most major economies is set to add to that pain.

Hays, which operates in 33 countries, said overall net fees fell to 996.2 million pounds ($1.3 billion) for the full-year to end June, from 1.13 billion pounds reported last year.

Shares of the recruiter were down 0.5% at 0926 GMT after falling as much as 35.7% so far this year.

$1 = 0.7574 pounds Reporting by Indranil Sarkar in Bengaluru; Editing by Rashmi Aich, Patrick Graham and Jan Harvey

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