Trouble in the world money markets, particularly the hi-tech sector, could mean bad news for the recruitment industry.

IT recruiter Harvey Nash has admitted that it is being hit by the downturn both in Europe and the US, with revenues down 10% on last year. In the UK, profits in the company’s search operation in telecoms and new technology were down by 10-15% compared to a year ago.

David Higgins, chief executive, said: ‘There has been a fall-off in demand from new technology and telecoms. What you are seeing is a slowdown in all levels of recruitment.’

Executive search firm Boyden also forecast a slowdown in the recruitment industry in its latest annual review published by the company’s London office. ‘We expect the search business to grow slightly less strongly in 2001,’ a spokesman said.

Boyden also believes that the slowing of growth in the US will lead to a resurgence in the need among clients for candidates with experience of restructuring and squeezing for performance.

Meanwhile IT staffing company Plexian has warned that the current round of job cuts taking place in the telecommunications technology sector is unlikely to address the skills shortage facing the industry. Director Roy O’Brien said: ‘The majority of staff being shed is at the more junior levels, such as relatively unskilled helpdesk staff or very junior programmers. The biggest shortage of skills is at the higher end of the skills market, for example among senior Java and Oracle programmers. We are seeing some senior staff being released, but not nearly enough to put a dent in current demand.’

IT job losses include a 4,000 reduction in Cable and Wireless’ global workforce, while Nortel Networks has announced 15,000 job losses since January, amounting to roughly 15% of its workforce.