Fund administrators have dramatically downsized in Bermuda as companies including Citco and Citigroup cut jobs and relocate staff to Canada where it’s cheaper and there’s a larger labour pool.Top executives in the fund administration industry expressed concern about the trend of firms cutting jobs in Bermuda while expanding in Halifax and Toronto and in the US.They warned the exodus is likely to continue with at least one other fund administrator poised to cut staff in Bermuda.One top fund administration executive said the once booming sector had gone from 1,000-plus to just 150 staff in the last five years.Executives said while some factors were out of the Island’s control, Bermuda needed to be more welcoming to international business or risk further erosion of the industry.However, not all the fund administrators we spoke to were cutting staff in Bermuda and some saw the downsizing of Citco and Citi as an opportunity to pick up clients who still wanted to be serviced out of Bermuda. Those who had no plans to cut back had strong personal ties to Bermuda.Citigroup sent shock waves through the community when it announced last month it was cutting 105 jobs at Citi Hedge Fund Services as the company relocated to the US and Canada.Fund administrator Butterfield Fulcrum axed 10 staff from its Bermuda office last August after reviewing the distribution of work at its operational centres - but said it is now hiring in Bermuda again and was here for the long-term.And Citco Fund Services announced this week it was cutting 15 to 20 jobs in what the company said was a “reorganisation” of its Bermuda office.An employment ad in Wednesday’s newspaper said it all though that ad did not reappear the next day.Announcing “Citco Halifax is Growing”, the ad touted the natural beauty, “sparkling coves” and “charm of port city Halifax”.“With over 200 employees currently, the Halifax location is slated for significant growth in 2012,” the ad said, noting there were career opportunities in operations, back office, corporate actions and trust, connectivity and training.A number of fund administrators have expanded or opened offices in Canada recently after aggressive marketing for their business by cities such as Halifax and Toronto.Among them Goldman Sachs Administration Services whose decision to open a hedge-fund administration office follows the on the heels of a similar move in 2006 by UBS.A Goldman Sachs executive told a hedge fund magazine: “We believe that Toronto offers an ideal mix of attributes for us. The business culture and time zone are favourable, there’s a large pool of talented workers and the communications infrastructure is first-rate.”Meridian Fund Services, which has a Bermuda office, has also opened a lower-cost servicing centre in Halifax.“We have lost our edge as being the jurisdiction of choice for funds and are now losing our reputation as being the jurisdiction of choice for offshore fund administration,” said Ede Conyers, executive director and chief executive officer of ISIS Fund Services. “Unfortunately there is downsizing going on and I think it can be expected that trend will continue.”ISIS employs 14 in its Bermuda office and five in its North Carolina office.Ms Conyers added ISIS was “happy and proud” to be headquartered in Bermuda, as the Island still had many strengths, including strong corporate governance and good infrastructure, and rather than downsizing in Bermuda is looking to grow their operation here.However, Ms Conyers added she was Bermudian, therefore has strong ties here.She said she could understand why other fund administrators were not growing their Bermuda offices.She said the trend actually began a number of years ago when Bank of Bermuda/HSBC started moving its fund accounting business and other operations to the US.“Large organisations have been looking to centralise as much as possible and have been downsizing for quite some time. It’s only become more public now.“They are looking at operating costs and obviously immigration plays a factor. If it’s difficult to do business in a jurisdiction and it’s expensive then a business obviously looks at why it needs to be there. Halifax has been very aggressive in wooing business and offering incentives in the last few years. Meanwhile, Bermuda has not appeared to be as welcoming.”Business Bermuda chief executive officer Cheryl Packwood said the organisation continued to support having no term limits on work permits.“We are concerned this is the beginning of a trend. We know there is concern in that sector and I know costs are a concern as well as work permits and term limits, and other factors,” Ms Packwood said. “We continue to believe strongly the Government needs to revisit term limits and remove them. We are in a different time period. We need to protect Bermudians but in the grand scale if jobs are leaving it is hurting Bermudians.”The long-time chief executive of a Bermuda-based fund administrator, which opened an office in Halifax four years ago, told us term limits on work permits had definitely had an impact on the industry.The CEO, who declined to be named, said: “It’s not just the term limits, it’s also to get a work permit processed at all it takes forever. When we needed to replace an accountant it took six to nine months and when we wanted to promote someone and announce it to the clients, we were required to advertise it!“At the end of the day there is just not enough understanding and support by the Government.”He pointed out the majority of his staff were Bermudian.He added: “It’s not just the cost of having staff here it’s the taxes on top of it and the productivity level can be low.”Peter Hughes, group managing director of Apex Fund Services said he has lived in Bermuda for 15 years and still sees the Island as a great place to do business.He said the recent downsizing is concerning, but could be an opportunity for his privately-owned company to grow its business in Bermuda and add talented staff.“I think the Government has taken steps in the right direction, but it remains to be seen how it affects the downsizing that’s been going on. The industry tries to recruit locally but we need to still be able to be the best in terms of providing a global service.”Apex employs 25 staff in Bermuda.Another top fund administration executive, who did not want to be named, said while his company had no immediate plans to cut staff, it had gone from 75 staff two years ago to about 60 today through natural attrition.He said he believed the actions by Citco and Citigroup “were purely about cost-cutting”, however, he said work permit limits create “uncertainty for us even if you get exemptions”.Butterfield Fulcrum Group and FORS principal shareholder Tim Calveley, who is the spouse of a Bermudian, said the fund administrator had a strong allegiance to Bermuda and was “here to stay”.He said the company had 40 staff in Bermuda and currently has four open positions and expects to add several more jobs by the end of the year, after winning a major new client.He added: “On the back of recent moves by other administrators we are actively looking for clients who may have been forced to have an administration change and still want to be serviced out of Bermuda. Some clients don’t want to be moved.”Mr Calveley said he had no concerns with Immigration or the work permit process and tried to maintain a close working relationship with the Department.BFG still has a big presence in Canada though, employing 65 staff in its Halifax office and 65 in its Waterloo, Ontario office.Those offices were opened before the ownership change and in an article two years ago in a Canadian trade magazine Steve Slessor, managing director of the company’s office in Waterloo, was quoted as saying the decision to open offices in Canada was motivated by capacity constraints and staffing issues in the traditional offshore jurisdictions of Bermuda and the Caribbean islands.“It is hard enough to recruit and retain qualified staff without having to worry about having work permits being revoked by the Government. If you have high levels of staff turnover that inevitably impacts on client service levels,” he was quoted as saying.The article was also revealing about Citco’s reasons for growing its offices in Canada over the past few years, quoting Kieran Conroy, managing director of Citco Fund Services (Canada), as saying: “The move to Canada has been very successful for Citco. The Toronto office has supported our growth over the years and we have been very happy with the quality of staff we are able to locate here.”