IT depts under threat as City braces for 20,000 job cuts
The City of London could lose 20,000 jobs in the next two years as the credit crunch starts to bite. As many as 11,000 jobs could be lost this year followed by another 8,200 redundancies in 2009. The number of deals is also expected to fall - mergers and acquistions will drop 26 per cent this year and trading volumes on the …
is so dependent on financial services its growth will slow to 1.3 per cent in 2008 and 2009.®"
Eggs(all) - Basket(singular).
It's lovely up 'ere in't north!
I guess that means its not a good time to move into a IT contract role in the City then
Traders and IT staff are the most superfluous (and often most expensive) in any organization. When it gets down to the nitty-gritty the people that don't absolutely contribute to the bottom line, or whose services can be pushed off on someone else have to go.
Surely if you want to try to maintain growth and profit with less staff you should be investing more in IT rather than less.
@Anonymous Coward.
From experience. The cost of the commute looses the increased rate offered. Stay out of the city and the savings mean you end up on an equivalent income ;-)
Why not relocate "The City" to a lower cost location, such as .. well .. anywhere outside of London.
Yes, absolutely. You need to keep the core skills that allow your business to function. What you don't need are all the additional bit'n'pieces. It just goes to show how many non-contributing people there are in IT.
It's part of the cycle. During the good times, more pointless job functions are created (think: standards, compliance, process, quality, anything with the word "manager" in the title) None of these people ever see a customer, generate revenue or create product. Generally, they do the opposite: slow things down by having a "sign off", come up with reasons why things can't be done and add to costs by adding redundacy to processes and architectures that they don't understand - and probably won't have the desired effect anyway.
It's only when times get tough that the fat is trimmed. The problem is that a lot of companies can't tell the difference between a productive employee and one who goes to lots of meetings. The consequence is that they shed th wrong people and soon afterwards either go bust or get taken over.
No one notices or cares until its not being done. That and the admitted lack of social skills among some of us is why we're always first up for the chop.
I wonder how your bottom line will look when your business critical systems crumble from lack of maintenance because you fired your "superfluous" sysadmin.
Not to worry though, I'm sure the ever positive contributions made by fuckwitted management will keep your business in good shape...
Erm, Paul, I suggest you have never actually had a serious city job, as you would know that isn't true (yet...)
I would also like to see a financial institution that operates successfully without Traders and IT staff. I would have actually said they were the two most vital....
Mr%
Great comment.
"The problem is that a lot of companies can't tell the difference between a productive employee and one who goes to lots of meetings. The consequence is that they shed the wrong people and soon afterwards either go bust or get taken over."
Ah, British management to a tee....ho hum.
http://news.sky.com/skynews/article/0,,30400-1312948,00.html
You work in the next cube to me? As all the config/change managers have taken the offices?
Would like to see a broker dealer being risk managed without traders.... and don't think that a trader who is paid less than someone in IT unless they are pretty junior....
Instead of sacking the greedy bastards in the City that created this mess in the first-place, they're going after the IT-Crowd, as usual.
Typical.
What about outside London, where normal wages and extremely close margins already mean people are losing jobs. Who cares about London...
London isn't where most of the people live, it's only where the stupidly paid live.
@Solomon
Getting rid of your expensive (or better trained) staff isn't always the right policy, IT afterall is what makes the whole of the economy work, so sacking your best staff is suicide. But Managers don't think like that.
Better to sack the managers... :)
...if they're doing their job properly, they should be contributing to the bottom line each day! Their actions directly impact the revenue of the company...
IT support is extrememly important, but unfortunately difficult to quantify...
"The problem is that a lot of companies can't tell the difference between a productive employee and one who goes to lots of meetings. The consequence is that they shed the wrong people and soon afterwards either go bust or get taken over."
Couldn't agree more
"Traders and IT staff are the most superfluous (and often most expensive) in any organization. When it gets down to the nitty-gritty the people that don't absolutely contribute to the bottom line, or whose services can be pushed off on someone else have to go"
*rolls eyes* Right. 'Save' £1m by sacking 20 'expensive' IT staff instead of just one champagne-swilling, roladex-clutching prat. After all, well-connected egomaniacs are something to cherish.
I'm pretty far from being a socialist and am quite happy with a capitalist democracy, but it's managerial blinkered focus on the bottom line that is ruining all business in this country.
The markets are 'bad', so do we accept somewhat less that record profits and dividends this year or do we sack a few thousand poor sods and worry about the weakening of the company later?
It's the same executives advocating "trimming fat" that were responsible for the power-base building initiatives that saw the hiring of that "fat" in the first place. I guess the people that cause the problems know best how to fix them? It's almost like they planned it that way...
Doesn't anyone wonder why the financial sector, supposed experts on risk, always seems dismayed and surprised when the market falls? Doesn't anyone question why it's ok for thousands of people's livings to be taken away rather than tell share holders, sorry, you'll have to forgo your new mercedes this year?
Because the executives and senior managers, government ministers and regulatory institutions have too many vested interests and too many fingers in the pie.
The longer I stay in "financial services" the dirtier, more abused and depressed I feel. I empathise with those anti-globalisation crusties more every day.
Paris, because ignorance is bliss.
odd as it may be, nows a great time to go contracting. most banks are ditching permies since permies = long term cost. contractors are short term, so right now permie budgets are frozen while contract budgets aren't, they really will be fixed term contracts though with no liklihood of renewal. might as well abuse it while you can
"The problem is that a lot of companies can't tell the difference between a productive employee and one who goes to lots of meetings. The consequence is that they shed the wrong people and soon afterwards either go bust or get taken over."
Got it in one
Paris, Because people who arrange all these meetings are no different from Paris, they have to be in the limelight and not really doing much...
>> "The problem is that a lot of companies can't tell the difference between a
>> productive employee and one who goes to lots of meetings. The consequence is
>> that they shed the wrong people and soon afterwards either go bust or get taken
>> over."
>>
>> Couldn't agree more
I would say that most can tell the difference, the problem is they value the latter more than the former - otherwise they would be so good at sacking the wrong people.
'It's lovely up 'ere in't north!'...
That's not what I'm seeing, I started looking about for new posts this week to see what's out there and compared to 2 years ago there's a very noticeable reduction in positions for my field which is worrying. Strangely there are still lots of positions in the financial sector, it's the more interesting companies (to me at least) which seem to have shut up shop, moved down south or just aren't hiring at the moment.
Spot on post. Before the dotcom bubble burst we even had a librarian at our place. We didn't have a library or a need for one, but we had a librarian.
Needless to say he was stamped out when the bad times rolled in.
"I guess that means its not a good time to move into a IT contract role in the City then" ... By Anonymous Coward Posted Tuesday 15th April 2008 13:28 GMT
The Perfect Time for a Creative Contract Creative Contact role, AC. Something with a more than just few Bits of dDeep Rooted and Routed Imaginative Flair..... Something IDerly with Great Bytes of Code XXXXPloring New and Virgin Fields for the City, although given the Modus Operandi/Vivendi of ITs Virtual Entrepreneurs, the City will have ITs Work cut out to Offer them everything they want to make IT worth their while not Playing away from Home for the Rest and/or for Foreign Interests.
But hey, if they can dDeliver the Goods and Create Wealth from Nothing rather than Losing it on Nothing, the more Spent/Lent/Rested with them, the Better....... especially considering the Hash so many of junked out bondsmen, Gits without a titter of common wit have made. Heroes in their own paper tiger world.
"Instead of sacking the greedy bastards in the City that created this mess in the first-place, they're going after the IT-Crowd, as usual." ...... AC, and you can imagine how that is not going to fix it, so just be patient.
I noticed a whole gaggle of sad grey gits were parading into No 10 today. You don't normally see so many gang members gathered for a Conspiracy meeting.
Amazing mate - I'm sure you work in the same Bank as me. I'm hoping I'll survive because I actually run and administer trading/risk management systems, which are very directly used to contribute to the bottom line. I can't wait for the several tiers of lazy middle management tw**s and people in other such non-jobs (like you say, mostly compliance people and project managers who got put on particularly stupid projects) to be shoved out of the door.
I have been in the IT sector for over 10 years and there is one thing that I have always known. We are classified as the bottom of the shit pile and always the first place any monetary cuts are made.
It depends on your point of view.
A lot of the financial services contracting staff that I know (me included) are more project focused, as opposed to BAU staff. If the banks want to save money, the first thing that goes is the budget for any new projects, not the core functions. This does not weaken the overall structure of the bank - it just puts new technologies and strategies on hold. When the article refers to "traders", I think it means traders in new business areas, for example, carbon credit trading. This is a relatively new concept, and so is not critical to the main business. They might of had a look at CC trading over the last year, with the new systems and projects that that business stream involves, however because it's not critical it can also be the first to be canned when things get tougher.
The jobs will dry up on the project-based side, but conversely the jobs will NOT appear on the BAU side because the banks are not stupid and won't be getting rid of the core staff. Besides, when times are tough and a good financial contract comes along, they will ALWAYS require previous investment banking experience, and anyone without this trying to get in will not even get their CV put forward for the role, let along get an interview.
That's life, you know?
Imagine an aircraft purposely built so that everything was interconnected... turn the headset volume up/down and the plane rises/fall... the pilot panics to offset the effect of several hundred passengers doing this... but his only control is the dimmer switch for the cabin lights... imagine the panic as he discovers even this meagre degree of control has gone.
Crazy? This is "globalisation" and the fallacy that "interest rates" can now control events... put your heads between your legs and kiss your...
Just offshore the jobs, paying £'s for a worker paid in Rupee is silly, most IT is offshored, just the managers are holding nto their positions.
Times are tough, and we dont need £ managers managing rupee workers, time to trim the fat.
Managers, as you reap, so you will sow, time of reconing :)
Hone up on those BOFH skills. You know, how to bribe the beancounter. Curry favor with the boss, or other "necessary" skills. Planting bad stuff on the HR's computer. Webcams for fun (in the right places). Oh, the list goes on.....
Not only Porsche but many other kinds of dealers as well !! Sad really, just when the Colombians were ramping up production of their marching powder, too !!
"If the banks want to save money, the first thing that goes is the budget for any new projects, not the core functions." .... By Anonymous Coward Posted Tuesday 15th April 2008 16:26 GMT
The core functions though ... Money from nothing ..... are the weakest link and easiest exposed. A new project to set up a force field around its operatives to keep the wolves from feasting on them, is what they need.......and badly/toute de suite......... and quite obviously, as it was dodgy banking deals which have launched the meltdown, it must be pretty apparent that the core functions of the "business" are vulnerable because of pathetic paternal performance and a rapidly failing model.
And it is naive in the extreme, and probably also to the point way past delusional madness, to even begin to think that things will ever again be the same, and as they were. That aint Progress and you can't turn the clock back to a former time, no matter how much paper you throw at it, or at IT. Be a wee Dear, Darling, and Boldly Go.......?
"Hone up on those BOFH skills. You know, how to bribe the beancounter" ... By Herby
Posted Tuesday 15th April 2008 16:59 GMT ...... A Selfless Gift of Danegeld would be Mutually Beneficial, Herby. Everybody's a Win Winner with that Love Bug.
Bangalore, perhaps ??
@Big Dave - been there, seen it, done it and buggered off first chance I got !! Now I'm fairly stress-free !! :-)
Contrary to popular belief IT does not make a direct contribution to the bottom line of a company - quite the opposite actually. IT is generally an NRE (non recoverable expense) that is part of the business cycle, certainly, but it doesnot help make the numbers work.
The fact that this is unrecognized by many IT personnel is why they don't understand their management. It's too bad really, but hey IT staff have had years to get over themselves and learn social skills and other such business necessaries but many, many of them haven't, and amazingly, remain focused on technical issues. So it's off to the unemployment line they go.
Solomon - nice to see thoughts I've had expressed so simply. Why IT people (well, a lot of Reg readers anyway,) genuinely sem to think they're gods is beyond me. One classic example that really got my goat a while back was "All businesses are built around IT." Really? In an IT company, maybe, but if you're a factory making stuff yor business is built around making stuff. IT is there to support that, not run it. I think that kind of arrogance leads to a lot of the antagonism between IT people and users, and as you say not developing the social side of things amounts to professional suicide. At least in my admittedly limited experience. It's the old saying about whether your face fits; regardless of your ability in IT, the attitude amongst management is that IT people are expendable because they seem to be a cost centre rather than producers, and even if someone's role is important - well, plenty more fish in the sea if they take a dislike to you for any reason. Grow up, people - it's not the 80s any more.
What jobs gets cut are not those that are less important. It's always those that senior management FEELS are less important. Those that can be eliminated with the greatest likelihood of causing the least immediate damage. That attitude always puts support staff at risk, even though it's the support staff that holds the business together.
After trains, it's time to fix finance ... at least with trains it's been obvious for the past 20 years.
But to be fair, if it were not for egomaniac stupid managers I would not have had half of the contracts I got. So fair enough if those projects, code pissers (including meself) and managers are scrapped, does not come as a surprise, I knew it was shyte.
@Solomon Grundy
IT personnel may be "social skilly" challenged but in my defence: a bunch of neurotic geeky nerds like me could never have achieved a massive world-class cock-up as subprime mortgage. It takes management's "savoir faire".You can't wipe £ 500bn with a NIL pointer ... unless you are Darth Vader.
@ Richard
"Why not relocate "The City" to a lower cost location, such as .. well .. anywhere outside of London."
The banks do. There are many large US and UK financial institutions with offices in Glasgow, and the total cost per employee (salary, office space, etc) is a fraction of London.
"You can't wipe £ 500bn with a NIL pointer"
Hmmm, bet I can, if I don't set that pointer tomorrow..., then again, it'll just fail to report the £500bn, not wipe it out of existence.
After all it was our fuck-witted president and his moronic administration that de-regulated the whole banking / loan sector. Thus causing humans to be the greedy stoopid pigs they tend to be when the rules are removed. And this time the ripples (as in ripping) have crossed the pond.
Up to this point El Presidente Fuck-Tard's biggest mess was contained to Iraq, but this credit thingy and US recession will maul lots of places. Plan for rough seas until 2010 or so. Please keep in mind that only 50% of 'mericans are morons - the rest of us are just trying to move forward and have a normal life.
At this point I've moved to IT - but in the Public Sector ... pay ain't great but the job is steady
the trouble is that the boys playing games with Money in London are about the only people who earn any money abroad now the oil is running out. As someone has to pay for all the food we eat but don't grow in this country laughing too much at their misfortune may be shortsighted.
You're either trolling or you're a prat.
Everyone in IT knows very well they are an "unrecoverable expense" - we have it rammed in our faces every 'performance review'. You must be one of those managers that can't find your arse with your elbow never mind work out what anything but the "insteresting" parts of your business contribute.
That you see it as a fault of IT folks that they "don't understand their management" is almost funny - who is responsible for making sure they are understood? And that you see it as a bad thing that IT folk "remain focused on technical issues" is hysterical.
Here's a little management lesson for you: IT staff are SPECIALISTS, management are GENERALISTS. These two things require a different type of person if they are to be really good at it.
That's it. Simple as that. The only difference is, historically, management had authority because they were owners of or related to owners of the companies. How long that historical justification for the self-importance of what are now blustering administrators is something to think on.
And to the Anonymous Coward sycophant of Grundy's; no not "all businesses are built around IT" but most have an essential IT element. But how many are "built around management"? A factory might have problems if the machinists had to fill in as managers, but you can be damn sure nothing would happen if the machinists didn't turn up.
Talk about "grow up": There's nothing 'special' about managers. Get a grip. Organising a project and going to meetings with other people to talk about their projects is not 'tough' or difficult. If it is stressful that's because you have to deal with other egotistical tw@ts like you all jockeying for the best spot at the trough. Poor things. I pity you.
Certainly the cost of designing and testing new systems are NRE but I think it is disingenuous to suggest that all IT is. If nothing else existing systems require ongoing maintenance and support. As for remaining focused on technical issues, I'm sorry but THATS OUR JOB!
@AC Tuesday 15th April 2008 20:40 GMT
Obviously how important IT is to your business depends on the industry you're in. However just because your business isn't based around IT doesn't mean your business wouldn't suffer without it.
Any large factory for example will have MRP/ERP and EDI systems to efficiently manage production. Without these your business would collapse yet I'd wager you don't even realise these they're there.
Most users only see the mundane side of IT that they take for granted like email or desktops. This combined with our sometimes poor social skills is what gives rise to the misconception that IT is simply a cost center.
In my experience antagonism between users and IT is mostly down to poor management. I'm well aware that I don't have the personal, organisational or business skills to be a manager which is why I concentrate on technical matters. Some managers however still insist on interfering in technical matters (e.g. code implementation or hardware specification) even when they don't have clue about IT.
I'm lucky in that the managers I now work for are actually quite decent and understand this. They provide us with business requirements for a system and we make it happen. Where they have a technical grounding in the area concerned they offer advice, otherwise they leave us to it. Which works well and is how it should be.
Paris because she knows more about managing IT than most managers...
....senior management, usually the CAO or COO, says to the whole business, not just IT, "Cut 5%" or "Cut 10%". This is across the board, from traders and sales teams to IT, HR, Operations, Compliance etc. What then happens is the senior managers each area will leave it up to their direct managers who then have to justify each and every member of staff. Usually it's an excuse to cut the "dead wood" - the people who don't really achieve much. And believe me, these can be senior people; in the last place I was at two Trading Managing Directors got the push. Others were people in IT who had been with that firm for 20 years and so got decent pay offs, and some were quite glad their time was up. Decent companies don't just cut IT and leave everyone else alone, the business as a whole gets cut fairly equally.
And you've all got to remember that the City is a cyclical market. Every six or seven years, some bright spark comes along with a bright idea, be it Dotcoms, Structured CDO's (the bit that's really impacting Investment Banks), Tulips or whatever. And then a few years later everyone realises it's all crap and the markets tank. Then people realise, "hold on, there's a whole load of companies that are actually making decent money and their shares are now cheap," and start buying up, and the markets recover. This one will end once the amount of CDO-style assets the banks hold are properly determined and their value realistically assessed (which is what the banks like Credit Suisse, UBS, Merril etc are all writing off at the moment).
At an investment bank these days, traders sit at computers, using programs to do transactions with databases.
Sometimes they read reports based in large part on often computer analysis of information on databases.
Some deals are done face to face, especialy the really big ones, but this kind of computer based trading is the bread and water of most banks. This makes banks a true "IT" company, rather than a computing one like say Microsoft. They work in information through the medium of technology, and thats 80% of what they do.
This has several effects:
* it makes expensive traders partialy computer replaceable, which is gradually happening and has been for years
* it makes faliure of computer systems as critical to the bottom line as faliur of non redunant plant at a plastics factory. We saw this in the french bank problem.
While there is a case for cutting employees and reducing future facing investment, I would argue that IT cannot be and is not concidered uncritical.
