THE IFSC-BASED subsidiary of Dutch financial group Citco, which services hedge funds, told employees in Dublin yesterday that there would be staff lay-offs at the firm within the next month.

The group, which set up a licensed branch in the IFSC in 1998, offers administrative services primarily to non-Irish funds.

Citco employs more than 1,000 people between the group's subsidiaries in Dublin and Cork.

A New York-based spokesman for Citco said that the firm had "entered into a consultative agreement with staff" but declined to say how many Dublin staff would be made redundant.

Citco Fund Services (Dublin) posted a pretax profit of $8.5 million (€6.6 million) in 2006, the most recent year for which accounts are publicly available, on a turnover of $57.2 million.

Staff costs totalled $21.7 million and the accounts say that the company employed 250 staff, though it is not clear if all these employees work in the Dublin office.

Another subsidiary of the Dutch group, Citco Global Securities Services, made a pretax profit of €2.1 million on revenues of €22.4 million last year. The company provides back office, data processing and systems development for Citco Bank Nederland, the banking arm of the group.

Staff costs at the firm totalled €18.4 million last year. The data processing arm of Citco has two offices in Cork - in Cork Airport Business Park and Blackrock.

Citco's Cork hedge fund administration operation announced earlier this year it would expand with an additional 150 new jobs being created over the next three years.

Billionaire US investor George Soros said on Tuesday that the global financial crisis will reduce the hedge-fund industry to as little as a third of its current size.

"The hedge-fund industry is going to move through a shakeout," said Mr Soros (78), one of the world's first hedge-fund managers and still among the best known. - (Additional reporting Reuters)