Spring chief executive Richard Barfield has ruled out a radical shake-up of the company’s IT recruitment business, although cost-cutting plans have been announced.

The largest agency in its sector, Spring announced the plans following a downturn in profitability.

Despite the bad news, Barfield claimed he would forge ahead with plans to invest £3m in the firm’s

IT infrastructure. A strategy of investing in the company’s permanent placement division will also continue, he said.

Spring has already consolidated all of its operations in Birmingham under one roof, and Barfield said he planned similar schemes in other parts of the country.

“There are always redundancies through natural attrition – what we are not doing is a major redundancy campaign within the business,” he told Recruiter.

A statement to the Stock Exchange said customers were delaying hiring decisions, and that Spring would be reducing costs.

The uncertainty among these clients means that although the company has several projects in the pipeline, many have not yet translated into hard cash.

The overall downward trend and weak trading in June will cause reduced revenues and a small operating loss in half-year results due out in September.

Contractor numbers are dwindling, and an anticipated increase in permanent placements has failed to materialise.

Analyst Mike Allen of investment bank Numis says Spring’s woes are not representative of the rest of the recruitment industry.

“Its business model is more geared towards higher-volume activities with larger companies,” he said.

Allen adds that although Spring wants to diversify away from this market, it is still exposed to the whims of larger clients.