For most of last year the top end of the art market seemed to be defying economic gravity. As the financial world teetered on the brink of disaster, Russian oligarchs and hedge-fund billionaires helped to shatter auction records for a contemporary work of art (Francis Bacon at $86.3million), a living artist (Lucian Freud at $33.6million) and a single sale of art in Europe (£144million for Impressionist and Modern works at Christie's in May).

The stock market plunge in September changed everything. Sotheby's own share price is down to a level last seen during the art market crisis of 1990 and the auction house announced last month that it would make savings of $7million (£5million) on employee costs. Christie's followed suit this week, promising to make significant staff cuts.

As the two rivals prepare for big sales next month, their first of the year, rampant spending is out. The backslapping atmosphere has been replaced by what passes for penitent austerity in the auction world.

Between them, the Impressionist and Modern arts sales in the first week of February are offering 514 lots estimated at £126million, about half of the 950 lots available for £224million in the equivalent sales last year. There is a similar pattern in the Contemporary sales the week after.

Both auction houses are desperate to avoid a repeat of the disastrous New York Impressionist and Modern sales in November when they were badly burnt after collections estimated at $800million during the summer fetched only $470million.

Pilar Ordovás, deputy chairman for Post-War and Contemporary Art at Christie's, said: “These are the first sales to reflect the new reality. Our main concern was not to have the biggest sale - it was to have a sale where everything sells. That's important to keep confidence going.”

This is not economising as most people would recognise it. Once-in-a-generation works can still expect to command spectacular prices. Sotheby's have a Degas bronze of a ballet dancer estimated at £9million to £12 million, Christie's a Monet at £15million.

Jussi Pylkkanen, Christie's European president, said: “The art market has never been directly comparable to the global economy. Many of our clients who buy major pictures live in a slightly different world and while some have been affected by the downturn others haven't.”

As the looming job cuts show, the financial crisis is hurting business more than the auction houses want to admit. During the boom years their aggressive marketing campaigns and lavish courting of new customers in the emerging economies of Russia, China and India helped to create a larger, more global market for dizzyingly expensive art than ever before. The durability of this new customer base is about to be put to the test.

One leading London dealer of long standing said that the auction houses had become primarily “experts in looking after widows and hustling rather than art” and should blame themselves for “flooding the market, trying to compete with each other”.

One route out of their predicament is a return to the longstanding collectors who have been priced out of the market in recent years by speculative buyers flush with new money.

Oliver Barker, the Sotheby's contemporary art director who was the auctioneer for Damien Hirst's record-breaking sale in September, said that many of these traditional buyers had attended a roadshow preview of the February sales in New York this week. “These guys are licking their lips to get involved again,” he said.

The weak pound was also expected to provide a much needed boost, bringing in customers from the US and Europe, Mr Pylkkanen said. “It's significantly less expensive to buy major art works in London right now," he said.

The auction houses are confident that they have done everything in their power to cut their cloth for the new financial climate. Only time will tell if it is anywhere near enough.

February's estimates

— £15 million: Dans la prairie (1876) by Monet (Christie’s)

— £9 million to £12 million: Petite danseur de quatorze ans (cast in bronze in 1922 from a wax sculpture made 1879-81) by Degas (Sotheby’s)

— £4 million to £6 million: Man in Blue VI (1954) by Francis Bacon (Christie’s)

— £1.8 million to £2.5 million Two Figures, Indian (1979) by Roy Lichtenstein (Sotheby’s)

— £600,000 to £800,000 Gala (1974) by Bridget Riley, (Sotheby’s)

Sources: Sotheby’s and Christie’s

Editor's choice

• The 100 Best Films of the Decade
• 70 facts you didn't know about Marvel
• The 50 Biggest Movies Of 2010