As bleak as 2008 was for U.S.-based mutual funds, things may have been even worse for offshore funds. Indeed, offshore funds have been so hard hit by redemptions that Ernst & Young is laying off fund auditors in the Bahamas, reports the Bahamas Journal.

Ernst & Young has responded to a downturn in business by merging its Bahamas with those in Bermuda and the Cayman Islands. The Nassua, Bahamas office will be taking over fund audit work from Bermuda and the Caymans. The move allowed E&Y to cut 13 chartered accountants and two administrators from its Nassau office on January 15, according to the report, which is based on unnamed sources.

The cuts are reportedly a response to a falling business volume as investors pull money from funds based in the Cayman Islands and Bermuda. The report adds that Ernst & Young lost work from three funds that are liquidating to meet investor redemptions. 

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