IT services expenditure expected to fall 4.6%

by Editor 4/21/2008 4:25:00 PM

Analyst firm Pierre Audoin Consultants has changed its forecast for software and IT services expenditure this year, now saying that they expect the spending to fall 4.6 percent after a 8.4 percent growth in 2007.

The consultants believe that costs related to systems integration, IT consulting and hiring IT contractors will suffer significant cuts in 2008. On the other hand, job offshoring and outsourcing operations are expected to rise this year because banks are working with reduced budgets.

PAC consultant Rajeena Brar says: “Banks are in a position of not knowing how long or how bad the credit crunch is going to be. At this point, banks are very reluctant to take on short-term projects which last two months to two years.”

Earlier this month, HSBC announced that it was closing down operations in a payments processing centre in Livingstone, Scotland, which would lead to a loss of 164 jobs.

In a similar move, Capital One decided to reduce the number of its UK staff by 40 percent, and consequently make 750 jobs redundant, as part of a cost restructuring plan.

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