Recruit Holdings Co. Ltd. reported revenue fell by 20.0% in its fiscal first quarter ended June 30 amid Covid-19. The Tokyo-based global staffing firm reported revenue fell across all business lines — including Indeed and Glassdoor, staffing and nonstaffing-related publishing businesses — due to the impact of the pandemic.
| (¥billions) | Q1 2020 | Q1 2019 | % change | Q1 2020 (US$millions) |
| Revenue | ¥475.4 | ¥594.4 | -20.0% | $4,426.0 |
| Gross margin | 50.0% | 53.3% | ||
| Profit for the period | ¥22.4 | ¥59.6 | -62.3% | $208.5 |
Recruit’s “HR Technology” segment, which includes Indeed and Glassdoor, saw first-quarter revenue fall by 27.5% year over year amid a decrease in sponsored job advertising and lower demand for recruiting solutions. The company noted the decline was 25.8% when measured in US dollars instead of Japanese yen.
The company noted that some questioned whether job seeker traffic on Indeed and Glassdoor should have increased because of the high unemployment rate when, in fact, there was an initial decline. Recruit cited several factors for the decline including that many job seekers were reluctant to search for new jobs and go to work because of health concerns; Indeed and Glassdoor are primarily resources for job seekers that are currently employed and interested in finding new work. In addition to the caution around changing jobs, workers may be receiving unemployment benefits that could discourage them from seeking new jobs.
Recruit noted that Indeed’s monthly unique-visitor traffic in July recovered to pre-Covid levels. Still, it cautioned that the trend could reverse if health or economic conditions worsen.
Separately, staffing revenue fell 12.3% year over year.
Revenue by segment
| (¥billions) | Q1 2020 | Q1 2019 | % change | Q1 2020 (US$millions) |
| HR Technology (Indeed and Glassdoor) | ¥74.1 | ¥102.1 | -27.5% | $689.9 |
| Media & Solutions | ¥132.9 | ¥187.6 | -29.1% | $1,237.3 |
| Staffing | ¥274.2 | ¥312.5 | -12.3% | $2,552.8 |
Recruit noted staffing revenue in Japan rose by 5.9%, but the increase was mainly driven by two extra business days in the most-recent quarter and increased billing prices because of implementation of equal pay for equal work guidelines in Japan on April 1.
Its global staffing operations, which include brands such as Staffmark in the US as well as operations in Europe and Australia fell by 26.6% with the decrease measured at 23.0% excluding foreign exchange impact.
Staffing revenue by geography
| (¥billions) | Q1 2020 | Q1 2019 | % change | Q1 2020 (US$millions) |
| Staffing (Japan) | ¥145.8 | ¥137.7 | 5.9% | $1,357.4 |
| Staffing (Overseas) | ¥128.4 | ¥174.8 | -26.6% | $1,195.4 |
Guidance
Recruit is not providing guidance given the unpredictable nature of the Covid-19 pandemic, but the company expects a significant negative impact from the pandemic in the second quarter and beyond.
Share price and market cap
Shares in Recruit closed down at ¥3,770, down 18.31% from their 52-week high of ¥4,615. The company had a market cap of ¥6.49 trillion (US$61.07 billion).