Fund managers faced with large redemptions and shrinking assets under management are putting IT spend on the back burner, and hiring has slowed to a snail's pace.
The drop isn't as sharp as it is in sectors in the securities and investment space, however. US fund managers are expected to cut technology spend by 4% in 2009 and European firms to trim budgets by 2% in the year ahead, according to a new report by consulting firm Celent.
Unprecedented market events have led some firms to make redundancies in recent weeks, and it seems IT is not immune to cutbacks. Calamos Asset Management axed 31 IT jobs last week, for instance, and Schroders has said it's going to reduce technology spend.
BlackRock and Putnam announced job cuts this week, following in the footsteps of Fidelity, Henderson Global Investors and Legg Mason.
Nick Findlay, managing consultant, investment programmes and projects, at Michael Page, says a lot of fund managers are trimming IT staff.
This does not mean, however, that the best individuals are now up for grabs: "A lot of big institutions are clearing out people who might have been surplus anyway, so the best candidates are not on the market at the moment," Findlay adds.
He says the most active recruitment is at boutique fund managers, but even they are hiring only in small numbers.
Those on the receiving end of job cuts should expect to be paid less should they be fortunate enough to find a new job, he says.
"Candidates are being more realistic and are willing to take anything from a 5-20% pay cut to secure a new position," says Findlay.