Wall Street Financial Crisis to Lead to Layoffs in IT

IT consulting firm Janco Associates estimates that 13,000 IT jobs at Lehman Brothers, Merrill Lynch and HP could be cut by the end of the year.

The Lehman Brothers' bankruptcy and Bank of America's buyout of Merrill Lynch will hurt IT professionals in more than just their stock portfolio.

Janco Associates this week declared that the financial firms' woes, along with HP's news it would lay off 24,600 over three years, would "glut the IT job market." Based on interviews with sources within Lehman Brothers and Merrill Lynch, Janco officials say that it has been confirmed that a large number of IT professionals in both organizations will lose their jobs by the end of the year.

According to Janco's estimates, more than 230 IT professionals at Lehman Brothers who make US$250,000 or more a year will be out of a job by year-end. At Merrill Lynch, more than 180 IT professionals making more than $250,000 a year will be without work as well, Janco says.

"Hiring was up across the nation as companies begin to focus on business expansion with a cautious eye toward the economy" based on the results of Janco's June 2008 IT Salary Survey, said Victor Janulaitis, Janco CEO, in a statement. "However with the recent events, that outlook has changed drastically."

Janco also estimates that of the 24,600 employees HP plans to lay off over the next three years, about 12,300 will be U.S- based workers. That could put the total number of IT jobs to be cut closer to 13,000, Janco estimates.

"High-paying jobs within the IT function are targeted first when companies go bankrupt or are acquired. High-paying middle-layer jobs are viewed as sources of immediate cost savings," Janulaitis said.

This story, "Wall Street Financial Crisis to Lead to Layoffs in IT" was originally published by Network World.

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