The Bermuda financial sector may be starting to feel the effects of an ugly job market in the US and Europe.

The US securities industry has shrunk by 75,000 employees since the end of 2000 and larger firms such as Merrill Lynch have cut 28.9 percent of their employees during that period - including 6,200 stock brokers.

Now, world markets are poised for more disruption due to an impending war with Iraq and any hopes of a post-war bounce have diminished. It seems inevitable that a further decline in investment markets will have a trickle down effect in Bermuda.

The Bank of Bermuda (the Bank) appears to be assessing efficiencies in relation to staffing levels and confirmed that they made four redundancies in the past week, however they said there are no plans for across-the-board cutbacks in response to the economic uncertainty.

A bank spokesperson said: "As a result of the overall softening of the markets, the bank has found that it has been able to absorb four positions in its brokerage area into other areas within the organisation."

In keeping with a general retail trend towards automation of services, the EasyLink Centre on Par le Ville has also lost three staff and is being evolved into a fully automated self service centre.

"We are making the centre the place for busy clients who want to quickly visit an EasyLink ATM or call our automated EasyLink Telephone Banking service. Further developments will be the installation of a coin dispenser later this year. The staff assisted services previously offered by the centre are available at the other branches." said the spokesperson.

He emphasised that the lay-offs were part of an ongoing process of seeking efficiencies and "not an attempt to react to the downturn by making across-the board reductions in workforce."

The Bank's CFO Ed Gomez has recently indicated that they are against general staff cut backs. When the Bank released its fourth quarter results for 2002, he said: "It's the nature of our business that workload remains relatively the same, even when fee income is under pressure from lower values, and when interest income declines because of lower margins. For this reason, we continue to believe that across-the-board reductions in our workforce would compromise our future, by diminishing our capability to maintain high delivery standards to our existing clients, and by impairing our ability to take on new business. We will therefore continue our efforts to improve efficiency through operating improvements and through disciplined control of discretionary costs."

Neither is the recent move to outsource IT services a move to reduce overheads, according to chief executive officer Henry Smith.

At the fourth quarter results conference call following a question from an analyst about whether there will be a financial benefit to outsourcing IT services, Mr. Smith said: "We've got to negotiate the final contract but certainly this is moving us in a direction that we want to go. It's important for us as a small organisation to do what it is that we do well and... we actually did a pretty good job on technology with a pretty tight little team. But for us to really reach out and compete on the basis that we'd like to, we'd like to focus on our four major businesses and then use the power of someone like EDS to support us on technology. Initially, I don't think we're not looking for much in the way of cost savings, but we're looking for a lot more power and a lot more expertise than we've been able to draw on in the past to develop our technology."

The bank's human resources department has been working with the employees whose jobs were cut to see if there are other opportunities for them within the organisation. "Employees who do not stay with the Bank will be supported in looking for alternative employment," said a bank statement.