IT, accountancy, hospitality, leisure and professional services recruiter Kellan Group is cutting the number of its consultants by approximately 10%.

The company says it intends to commence 2009 with a reduced headcount as part of  “requisite steps” to reduce its cost base after encountering “continuing deteriorating economic conditions”.

In a trading update for the fourth quarter of 2008, the company says it has seen “a rapid and significant slowdown in the demand for permanent placements across Kellan’s markets”. It says the situation has deteriorated “specifically during the last few weeks of trading”.

The company now expects earnings for the full financial year ended 31 December 2008  to fall “materially short of the current market expectations.”

The company says that by cutting costs it expects to generate “significant savings” across the group from the first quarter of 2009.

John Rose, chief executive of Kellan Group, says that despite the difficult conditions: “We remain committed to the longer term strategy of the group and maintain our confidence in the strength and longer term scalability of our brands which we believe will position us well for any future improvement in market conditions.”