Industry

Finextra

Commonwealth Bank of Australia (CBA) is set to axe IT staff and shelve technology projects as part of a A$370 cost cutting programme, according to local press reports.

The Australian newspaper claims CBA’s decision to cut its cost base by five per cent came at an executive committee meeting last week, as the bank braces itself for potentially stormy economic weather.

The cuts will come from across the business but most job losses will involve contracted staff, says the paper.

In addition, major technology spending and projects will be shelved, although CBA’s four year, A$580 million programme to overhaul its core banking legacy systems is not expected to be affected.

Having a look at your IT costs is an important part of due diligence, establishing where your costs lie, what changes can be made to your infrastructure, your process and the way you do business are equally important. Understanding which systems run on which infrastructure, where the delays to excellence are etc, allow you to establish what changes can be made to deliver the best value to delivery ratio.

Finextra

With the economic crisis worsening, financial firms in the City of London are set to cut 62,000 staff by the end of next year, taking employment back to levels last seen in 1998, according to a forecast from the Centre for Economics and Business Research (CEBR).

CEBR predicts that the number of financial sector jobs in London will decline by 28,000 in 2008, from 2007 levels. A further 34,000 jobs are set to be shed in 2009.

City job levels will fall from 353,000 in 2007 to 325,000 in 2008 and 291,000 in 2009. This will return total staffing numbers to those seen a decade ago.

The chances for a strong bounce-back in the City from 2010 onwards “also appear to be slim”, says CEBR.

The figures are a dramatic revision of CEBR’s forecasts in April when it said 20,000 City jobs will be culled over the next two years. This was a revision of its October 2007 report which predicted jobs would decline by 6500 in 2008, but suggested losses would be “short lived” with most sectors seeing increases in 2009 as the US economy and the financial markets recover.

We’ll have to see, in the meantime life continues, how you as an engineer, a manager, a vendor or an end user work around these exciting times will depend on you and your business. Focus on your role, on continuing business and everything will follow - any decisions about your future have already been made, worrying detracts from your ability to deliver, maintain your reputation and earn revenue.

Finextra

The UK’s financial services sector will cut back on technology spending over the next year as firms move to tighten their belts during the economic turmoil, according to a survey by the Confederation of British Industry (CBI) and PricewaterhouseCoopers (PwC).

The survey of 100 representatives from financial institutions found that firms are set to slash IT spending in the coming year. When asked if they’d spend more cash on technology over the next year, the balance of respondents in the survey was -6%.

Securities trading is most likely to see a fall in spending, with a balance of -35% predicting more technology spending over the next year, a swing from +53% in December.

Banking respondents were only marginally more optimistic, with a balance of -24% compared to +49% in December.

But other areas of the finance world were far more positive about the prospects for increased IT spending. Insurance broker lead the optimism with a positive balance of 38%, closely followed by building societies on +34% and general insurance on +33%.

The demand for solutions that can provide more effective return on investment should continue. The business benefits operationally and financially could override any debates about projects in virtualization, data center consolidation or grid for that matter. The business driver, the revenue saved or generated will be the driver, a more business focus, for every $ spent I want $1.5 or more value. We’ll have to see one of the interesting things to consider on the client side is that in some respects how true a statement this is.

Remember if you’ve got a year old or two year old pc/notebook, it might actually be cheaper to replace it than fix it, to replace that system board, that memory chip, when you consider the ‘downtime’ the time taken for an engineer to visit, collect the unit, run diagnostics etc. It’s all going to depend how you pay for your desktop services, the volume of units involved etc.

Finextra

British banking group Hbos - which is set to be taken over by Lloyds TSB - is planning to offshore around 2000 UK-based IT jobs to centres in India, according to press reports.

A report by UK tabloid the Mirror says the technology jobs, at Edinburgh and Halifax, are expected to go early next year.

The paper says it has seen documents that show the offshoring plans were drawn up by executives during a trip to India before the proposed Lloyds TSB takeover deal.

It will be interesting to see how the merger goes ahead, what elements of the IT are taken offshore, development? Infrastructure support?

The recent excitement in the financial sector is set to continue for the short term, how this will affect your role, your business is going to depend on you. With these new challenges comes opportunities in the market, projects in merging application and infrastructure, of standardizing platforms, bringing new workload on to the grid; or making one VMWare infrastructure work with another.

Finextra

The purchase of Lehman Brothers’ North American investment banking business by UK bank Barclays will include most of the defunct institution’s technology, according to early reports.

Barclays, the UK’s third largest bank, has stumped up $1.75 billion of which only $250 million will pay for the trading assets of the investment banking and capital markets business.

The remaining £1.5 billion will be used to pay for Lehman’s New York headquarters, two data centres in New Jersey and some related technology.

Alongside Lehman’s internal technology infrastructure it also has a number of commercial, technology-related projects include FXLive, an electronic FX trading platform, LMX Trading Strategies, an algo trading and execution suite, and LX, its global crossing network.

It’s been an exciting week in the financial sector, with the different mergers/transactions and the actitivies at Lehman Brothers. Exciting times are ahead, challenging yes, there will be job losses in the industry but with mergers come opportunities for revenue generation, for integration/decommissioning or hardware refresh projects. I like to think that as one door closes, there are others opening up, how you as an IT person, a vendor or a business is going to depend on you.