Firms Target IT Staff For Chop As Downturn Bites

UBS is said to be the latest firm to be busy chopping IT heads. Our sources have revealed that over 100 IT staff will be made redundant over at UBS in London early next week. Investment banks have put off a number of large IT projects in order to save on costs, and are squeezing IT support as headcount generally shrinks. Citi CEO Vikram Pandit told analysts last month that he is looking to reduce his firm's cost base by up to 20%, and that IT costs are very much in the line of fire.

Bloomberg reports that Drake Management, a New York-based hedge fund started by former BlackRock execs, is to wind down its $2.5bn Global Opportunities Fund after losses of some 25% last year. The firm intends to launch a successor fund later this year.

The Wall Street Journal reports that Citi has raised some $4.5bn in a stock offering to beef up its balance sheet. Analysts wonder why the firm chose to raise such a minimal amount. Oppenheimer analyst Meredith Whitney said Tuesday that 'the fact that the company raised such a small amount of capital at this time confounds us. Citi needs to raise an additional $10 - $15bn or sell several hundreds of billions of assets in order to truly shore up its capital position'.

Chicago's Hedge Fund Research Global Hedge Fund Index rose 1.5% in April - a welcome relief to the industry, which had its worst start to a year in the first quarter for almost 20 years.

Bloomberg reports that US Treasury Secretary Hank Paulson has said that things may not be as bad as they seem. Speaking on Bloomberg TV earlier this week, Paulson said: We are closer to the end of this problem than we are to the beginning......Despite some of the things we are going through this (US) economy is still growing, albeit modestly'.

Finally, The Financial Times reports that PIMCO, the world's largest bond manager, hopes to take advantage of the current market turmoil by picking up bankers made redundant during the. According to the newspaper, the firm is looking to hire over 250 staff as it moves into new products and beefs up its international presence.