Butterfield Fulcrum Group has axed some 30 staff from its Bermuda office due to the impact of the global economic crisis.

The fund administration company, which was formed when Fulcrum Group and Butterfield Fund Services merged in August last year, also made around 25 other redundancies from its Cayman Islands operation.

It is the second biggest lay-offs announcement in Bermuda in the past year, following XL Capital Ltd.'s decision last August to reduce its workforce on the Island by 47.

At the time of the merger, Butterfield Fund Services had around 100 Bermuda-based employees, while Fulcrum Group had eight staff on the Island. According to its website the company employs more than 400 people globally and holds around $100 billion in assets under management.

Butterfield Bank, owner of a 40 percent stake in Butterfield Fulcrum Group (BFG), said it was trying to find alternative positions at the bank for some of those who lost their jobs.

Its clients include around 1,000 hedge funds, fund of funds, private equity and institutional investment managers.

Investment funds worldwide have suffered from investor withdrawals and a reduction in the value of assets held as financial markets have plunged, particularly since mid-September last year.

The net asset value of Bermuda's investment fund industry dropped $39 billion in last year's third quarter alone, according to the latest statistics from financial regulator the Bermuda Monetary Authority.

A spokeswoman for BFG said the company had to review its global cost base and take steps to restructure its operations due to the downturn in the financial markets, resulting in certain positions being made redundant.

But they would not comment on the numbers of Bermudians and non-Bermudians who were made redundant or say which positions had been affected.

"There will be approximately 25 redundancies from offices in the Cayman Islands and approximately 30 from Bermuda," BFG said.

"Even after this, Butterfield Fulcrum will have very substantial operations in Bermuda and Cayman and we remain firmly committed to these jurisdictions."

The redundancies will be phased over nine months, according to the spokesperson who said the company was announcing its restructuring in a way that gives its staff as much advance notice as possible.

"Global financial markets have seen an extraordinary level of turmoil in the last several months," she said. "This has impacted almost every sphere of economic activity.

"In the case of Butterfield Fulcrum, we have seen redemptions from our client funds, lower trading performance and fund closures.

"As a response to this, we have had to review our global cost base and take steps to restructure our operations. This restructuring has resulted in certain positions being made redundant in Bermuda.

"This restructuring will take place over the next nine months. During this period we will work very closely with employees who are impacted to offer them assistance in finding alternative placement. We are giving significant notice to impacted employees to give maximum time for them to find other employment opportunities."

The spokeswoman added that BFG had planned this transition "very carefully" and believes that its service to current clients will not be affected, servicing them on a 24/7 basis, through its global service team and technology platform.

A spokesman from Butterfield Bank, which owns a 40 percent share in BFG, said that the bank had been informed by BFG's management of the redundancies, which affected some former employees of the bank.

"The changes are being effected by BFG management to help ensure that the company continues to be properly structured to serve its global client base with maximum efficiency in light of the recent downturn in global financial markets," he said.

"Although the loss of positions at BFG in Bermuda is unfortunate, we believe that BFG management is acting in the best interests of the company and that employees are being treated fairly and with respect.

"At the time of the merger, Butterfield Bank pledged to endeavour to assist former bank employees in securing positions within the bank in the event of future redundancies at BFG.

"Butterfield Bank is honouring that commitment and, although we cannot make any employment guarantees, we are working to identify suitable opportunities for impacted BFG employees on a priority basis."