GUEST COMMENT: Banks have overcut IT staff and projects will suffer
When politicians, usually presidents, come close to admitting an error, they will say, "Mistakes were made."
As CEOs and other executives order the layoff of hundreds of IT staffers, they are saying, "Mistakes will be made."
The news has been harsh and unrelenting. One report estimates that 330,000 financial services jobs have been lost since the economic crisis began in the US last year.
According to a research from the City of London, the UK is set to lose 35,000 financial services jobs before the end of the year.
The authors of the report say that hiring depends on economic growth, which won't happen for quite some time. "We'll have slow growth for the next few years, and that takes us to 2013 or 2014," says Stuart Fraser, chairman of the policy and resources committee for the City of London.
For a CIO, this is especially bad news, as cutting staff and doubling or tripling the workload for stressed IT workers will inevitably lead to shortcuts, unfinished and delayed projects, and diminished quality control.
If an IT team has been through round after round of layoffs, the attention to detail will suffer. Outsourcing to a third party - whether in the same country or around the globe - means time spent in meetings and trips to the outsourcing headquarters, while a small staff works on IT projects at home.
Telling people to work harder and faster is no longer the answer. It might have worked in the first weeks of a crisis but not as we approach the one-year anniversary of the collapse of Lehman Brothers and AIG, which was the psychological starting-point of this recession.
Are investment firms prepared to accept responsibility for these mistakes? Imagine if disaster struck and no one knew the emergency procedures. "Where's Jerry? He's supposed to know how to divert the data to the business continuity site and activate the backup servers." Sadly, Jerry was laid off in June in a quiet staff reduction sweep. One day he was there, and now his office is empty.
Mistakes will be made.
Phil Albinus is editor of financial technology magazine Waters
