Jobs at risk as banks prune IT budgets

by Gill Montia

Story link: Jobs at risk as banks prune IT budgets

IT jobs in the UK and India are under threat, as European and US banks cut or freeze IT budgets.

According to a report in “The Times” Tata Consultancy Services (TCS), India’s largest IT outsourcing company, has had two major contracts cancelled by leading banks.

TCS has not named the clients involved by they are rumoured to be Citibank and Merrill Lynch.

In addition, Kris Gopalakrishnan, the chief executive of Infosys, India’s second-largest software exporter, has reported: “Lots of budgets that are being finalised are flat; some are down … the declines are in single digits”.

Last year, global banks spent an estimated £170 billion on IT, a 6% rise on 2006.

In London, salaries for computer programmers have spiralled in recent years because IT professionals have been in short supply.

Decisions not to upgrade the technology the sector relies upon so heavily are certainly having their effect on the Indian outsourcing industry with both IBM and TCS reducing staff numbers in India in recent week.

In the UK, jobs could also be at risk as banks review their IT budgets in the light of losses from the credit squeeze.