Wall Street Cutbacks

By Stan Gibson  |  Posted 2008-09-16 Print this article Print


The spectacular downfall of twin Wall Street stalwarts Lehman Brothers and Merrill Lynch bodes ill for IT spending at all Wall Street companies, Bartels said. "Wall Street firms will have major cutbacks to their business. With consolidations going on, they may consolidate IT systems as well," he said.

However, the impact should be confined to Wall Street and won't spread to other areas of the economy, said Bartels, who added that, overall, the dip in Wall Street IT spending won't greatly change the overall IT budget picture: "The financial services industry comprises only 8 percent to 10 percent of IT budgets; Wall Street might be 2 percent to 3 percent."

Just how much IT pros are hunkering down is open to debate, however.

"If we're in a recession, it's not being reflected in IT budgets. There's not a panic setting in," said Jerry Luftman, associate dean and distinguished professor at Stevens Institute of Technology and vice president for academic affairs for SIM (Society for Information Management), an organization if IT executives.

Luftman manages SIM's annual survey of its membership, which found that 80 percent of members expect their IT budget to increase or stay the same in 2009.

However, Luftman said, survey respondents tend to be optimistic about the coming year and that actual spending tends to be lower. "Eighty percent will probably turn out to be a little closer to 75 percent," said Luftman.

In last year's SIM survey, 78.4 percent of respondents said their IT budgets would remain the same or increase. The actual figure, reported in this year's survey, was 75 percent, according to Luftman. The results of the latest survey will be published at the organization's SIMposium conference, which will be held in Orlando, Fla., in November.

"Given the economic fear that we're hearing about, companies are not panicking," Luftman said. The reason, he said, is IT people have made significant progress in tying technology to their organization's business mission. As a result, IT is not so frequently looked at as merely an expense to be cut. "IT people are much more engaged with their business partners now. Budgets aren't getting sliced, and hiring isn't falling off so much," he said.

Stan Gibson is Executive Editor of eWEEK. In addition to taking part in Ziff Davis eSeminars and taking charge of special editorial projects, his columns and editorials appear regularly in both the print and online editions of eWEEK. He is chairman of eWEEK's Editorial Board, which received the 1999 Jesse H. Neal Award of the American Business Press. In ten years at eWEEK, Gibson has served eWEEK (formerly PC Week) as Executive Editor/eBiz Strategies, Deputy News Editor, Networking Editor, Assignment Editor and Department Editor. His Webcast program, 'Take Down,' appeared on Zcast.tv. He has appeared on many radio and television programs including TechTV, CNBC, PBS, WBZ-Boston, WEVD New York and New England Cable News. Gibson has appeared as keynoter at many conferences, including CAMP Expo, Society for Information Management, and the Technology Managers Forum. A 19-year veteran covering information technology, he was previously News Editor at Communications Week and was Software Editor and Systems Editor at Computerworld.

Submit a Comment

Loading Comments...
Manage your Newsletters: Login   Register My Newsletters

Rocket Fuel