So far the IT industry has emerged relatively unscathed from the credit crunch. But with the governor of the bank of England, Mervyn King’s gloomy admission yesterday that the UK is on the verge of a recession, the good times must surely be coming to an end.
Today’s news that Yahoo plans to lay off 1,500 employees is likely to set the tone for a difficult 12 months ahead. Some major IT suppliers are already tightening their belts, trimming their advertising budgets, and reviewing their head counts.
We will probably not feel the full effects until 2009. Leading analyst, Richard Holway, predicts a 2% recession across IT. But there will be winners are losers. IT companies supplying nice-to-have technology will be badly hit, as the shakeout in Silicon Valley implies.
The real winners will the IT companies that can save businesses money – not in five years time – but now.