SThree profits crater as AI and geopolitical instability stifle hiring

The company’s struggle is most visible in Germany, its largest market, where net fees dropped 14% amid dwindling demand for software development talent. While the U.S. remains a bright spot with a 12% rise in net fees, the broader picture for the staffing sector remains bleak. Clients are increasingly opting for short-term contract work over full-time roles, a shift that complicates revenue stability for agencies like SThree.

CEO Timo Lehne pointed to a volatile climate where geopolitical tensions and technological disruption are forcing a fundamental reset in how organizations build their teams. Despite the sharp decline from the £10.1 million profit reported during the same period last year, the firm maintains an optimistic outlook for fiscal 2026. SThree is projecting a pretax profit of £10 million, a target that sits above current analyst expectations of £8.8 million, as it leans into cost-cutting measures to weather the current slowdown.