Hays recruitment firm has suffered from the weakening labour market.

Recruitment company Hays has announced it will cut 250 UK jobs as the recession takes its toll on the employment market.

In its interim management statement released today (9 April), Hays reported a 31% drop in fees; attributed mainly to deteriorating market conditions across the world. The permanent placement market has suffered in particular from the economic crisis.

The news comes after recent predictions that the rate of unemployment in the UK could rise even further over the next few years. UK unemployment hit the two million mark in March 2009; the highest figure since 1997.

Hays has cut its UK headcount by 9% in the three months to the end of March which brings the total percentage of job losses in the last year to 27% or about 900 positions.

Globally, Hays has reduced its workforce by 11% in the last three months, making the total for the world 19%.

Hays has suffered a slump in fees across its business. The most dramatic fall for Europe’s largest recruitment company was in the permanent placement division, which witnessed a drop of 46%.

Demand for temporary placements remained “broadly stable” but also suffered a drop in fees of 14%.

However, revenue in Hays UK public sector business, which represents a third of UK and Ireland net fees, increased by 3% in the quarter.

Commenting on the third quarter results ended 31 March, Alistair Cox, Chief Executive of Hays plc, said: “We expect market conditions will remain tough for some time.

“However, the experience of our management teams across the world, our leading market positions, our public sector presence, our balance of permanent and temporary placement business, and the strength of our balance sheet, place us in a strong position to deal with these conditions.”