Showing posts with label Finance. Show all posts
Showing posts with label Finance. Show all posts

Friday, December 5, 2008

, , ,

IT staff desperate to keep their jobs

A survey of over 600 IT staff in New York, London and Amsterdam has shown that over half are concerned about losing their jobs, and over a third would work longer hours with a 25 per cent pay cut to stay in employment. Click here for complete story.

Thursday, December 4, 2008

, ,

State Street to cut up to 1,800; Wellington also confirms layoffs

State Street is laying off just weeks after receiving $2 billion as part of the Treasury Department's plan to loosen lending.

Two more Boston financial companies disclosed large rounds of layoffs yesterday, the latest in a wave of cuts sweeping the local investment industry in the wake of plunging stock markets.

State Street Corp. said it plans to eliminate 1,600 to 1,800 positions over the next several months, or about 6 percent of its workforce. Separately, Wellington Management also confirmed a cut, reportedly 10 percent of a 2,100-person workforce.

Fidelity Investments is in the midst of eliminating 3,000 jobs, and MFS Investment Management is cutting about 90. The Chicago staffing firm Challenger Gray & Christmas reported yesterday that financial firms cut 91,356 jobs in November, the largest monthly reduction since September 2001, when 96,333 positions were eliminated.

State Street is initiating the cuts just weeks after receiving $2 billion in taxpayers' funds as part of the Treasury Department's plan to loosen squeezed lending markets by loaning capital to the financial sector. The government funds came with few restrictions, although government officials urged the recipients to use the money to increase lending. State Street, however, is not a retail or investment bank; much of its business is providing services, such as recordkeeping, trade settlements, and the like, to the money-management industry. It does have an investment management arm, too.

Steve Adamske, a spokesman for Representative Barney Frank, the Newton Democrat who spearheaded the financial industry bailout in the House of Representatives, said he didn't have enough information to comment directly on State Street's actions.

But Frank hasn't criticized layoffs in the past by other companies that received government funds, including Citigroup Inc., and Adamske said the first priority of the money should be to encourage bank lending.

"We sincerely hope the funds provided by the government will go for the stated purpose in the act, to provide liquidity in the financial system and get lending moving again," Adamske said.

State Street spokeswoman Carolyn Cichon said it would be "apples to oranges" to compare the public cash infusion to the layoff decision, since the government money was meant to boost the company's capital level rather than cover operating costs. "Our core business remains extremely strong," she said.

The firm emphasized the job cuts would help its financial position. "It is important for State Street to continue to deliver consistent earnings growth, particularly during this difficult environment," State Street chief executive Ronald E. Logue said in a statement. "Taking this action increases our ability to do so."

State Street employed 28,900 people worldwide as of October, about 13,900 in Massachusetts. Cichon said she couldn't detail how many local jobs would be eliminated.

The reductions will mainly occur among middle and senior managers, the company said, instead of among lower level positions that provide customer service. About two-thirds will be at its North America operations, with the rest in Europe and Asia, the company said.

State Street said severance benefits and other costs will lead to pretax charges of $325 million to $350 million, or 51 to 55 cents per share. The action will save as much as $400 million annually, it said.

Separately, Wellington Management has eliminated 10 percent of its workforce, the industry publication Pensions & Investments reported yesterday, citing an unnamed source.

A company spokeswoman wouldn't confirm the figure but said that given the market's recent turmoil, the firm has made efforts to cut expenses.

"Included in these efforts was the difficult decision to reduce our workforce, which has been implemented over the last several days," Wellington said.

"In doing so, we focused on eliminating work and restructuring positions where the change would have minimal impact on our investment and client capabilities."
, ,

Will your IT job survive the financial meltdown?

Source: InfoWorld
Fearful tech workers tiptoeing along the shaky alleys of Wall Street -- and fretting about losing their jobs -- should take a deep breath. Of the more than 100,000 job losses expected as a direct result of the financial crisis, only a tiny slice will likely be from the tech ranks, figures Sean O'Dowd, an analyst at market researcher Financial Insights.

As with any market consolidation, finance companies "will look for redundancies and overlap," O'Dowd says. For IT, that means management, not programmers, admins, and other line staff. "I think [layoffs] will come out of the IT management layer such as CIOs, so you're looking at hundreds [of layoffs], not necessarily thousands. Companies will continue to need a lot of the rank-and-file IT folks."

Greg Carr, CEO of consultancy McGat Enterprises and an IT finance veteran who now runs a Web site that helps IT finance professionals manage technology costs, says he recently talked to his 16 IT management-level advisors from Unisys, Wells Fargo, Deutsche Bank, and other firms, "and they are all nervous. … My friend at EDS is looking for cover right now."

Although Wall Street firms' general pool of tech employees may be relatively safe for the moment, the tech vendors who supply them will see job cuts as their revenues fall.

And over time, there'll be a glut on the scale of the dot-com bust of IT finance pros looking for work, predicts John Estes, vice president of staffing firm Robert Half Technology. "We're advising our IT candidates, especially the ones really freaked out by this, to dust off their résumés and be prepared to show accomplishments with tangible results" to potential employers, he says. Still, Robert Half Technology hasn't received a flood of calls from IT workers yet, he adds.

Death of the discretionary spend
Estes, O'Dowd, and Carr agree that the biggest hit to IT finance pros will come to those working on discretionary projects. "There is a slow-up of IT projects, anything from VoIP to replacing legacy equipment," says Carr.

Capital markets firms have traditionally led in the adoption of new technologies, but given the uncertainty of the future, they've made an abrupt about-face. Financial Insights reports financial services firms put 22 percent of their IT budgets toward discretionary projects. "For institutions facing bankruptcy or being acquired, we see that spend being put on hold," O'Dowd says.

Or worse. Robert Half Technology provides tech workers to a systems integrator in the Northeast whose client is an insurance company. "They just put the brakes on a new project -- not postponed but cancelled," Estes says.

Assessing how much your job is at risk
Generally speaking, tech workers in finance fall into four categories. Business-infrastructure folks handle everyday IT needs. Networking pros are focused mostly on connectivity and latency issues. Datacenter administrators must be skilled in heavy transaction volume, grid computing, and virtualization. And some IT workers and developers support proprietary trading activities.

The financial crisis will affect the last group the most in the near term. That's because the bulk of job losses from the likes of Bear Stearns, Lehman Brothers, Merrill Lynch, and others will come from shuttered lending units -- thus, IT folks solely supporting these lines of business may be at risk.

Coming from a position of strength
The upside is that most of these at-risk financial IT workers have specialized financial skills that will continue to be in high demand from financial companies of all sizes on the prowl to pick up this talent. Such IT people have been eagerly courted, making the supply low; the financial crisis may give second- and third-tier companies a shot at this talent pool, and perhaps for less money than in the boom times. Such highly valued skills include working at the application level on algorithmic trading programming, complex event processing specific to a trading environment, order management, derivatives trading, and evaluation applications.

Although their skills are not easily transferable to other industries, "these are valuable jobs that you're not going to see going out the door," says O'Dowd. "Business analysts won't be going anywhere, either."

O'Dowd also predicts IT workers in business infrastructure, networking, and datacenters have at least a year of job security, as finance firms work through the heavy integration process caused by the current wave of consolidation. It'll take some time before these firms figure out their needs from here on out.

But after that, all bets are off. "Once they've evaluated their ongoing needs, you might see a spike in layoffs at lower-level IT positions," O'Dowd says. Still, O'Dowd contends such IT workers shouldn't have a problem finding work -- if not in finance, then in outside industries. "IT folks in the financial services industry deal with firms that demand the greatest amount of performance, scale, volume and speed," he says, "and they have the ability to see things in worst-case, stressed scenarios -- there may be a premium for folks like that."

That premium, though, may not be as rich as in the financial sector, warns Robert Half Technology's Estes. Salaries and benefits likely won't be the same.
, , ,

More financial services IT jobs cut


IT Job cuts in the UK financial services sector are continuing as companies get themselves ready for worsening economic conditions.

HSBC will cut another 500 jobs and Swiss banking giant credit Suisse has announced 650 UK jobs to go. Both announcements include IT jobs cuts.

Banks have been reducing staff numbers. They see IT and back office functions as surplus to requirements when business levels fall.

HSBC cut 1,100 jobs in its investment banking division in September including 500 front and back office jobs in London.

Credit Suisse, which made a loss in the third quarter of this year of £704m, has announced 650 job cuts including IT support functions.

"Due to market conditions and projected staffing levels required to meet client needs, we are reducing headcount by approximately 650 in the UK," said Credit Suisse.

Citigroup plans to cut its global workforce by 52,000 jobs across all businesses and geographies in the near future. Citigroup CEO Vikram Pandit revealed last month that the bank would cut 20% of its employees at the group.

A Citigroup spokeswoman said half of the job cuts will come from the sale of business units. The company had earlier announced 18,000 job cuts when it sold its Global Services unit in India to Tata Consultancy Services for £300m.

Pandit said earlier this year that it was feasible for the bank to take 10%, 15% or 20% off its cost base, especially in IT and operations.

The Royal Bank of Scotland (RBS) is expected to make thousands of job cuts as it comes to terms with the economic slowdown. According to various reports last month, up to 3,000 jobs will be cut in the bank's global banking and markets divisions.

Barclays is also expected to cut IT jobs at its FirstPlus loans business as it closes to new business. It will keep its IT infrastructure to process existing customer loans, but is scaling it back.