Fasten Your Seat Belts! The Economic Storm Clouds Are Brewing
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The Corporate Struggle
According to a recent report by the global outplacement consultancy firm, Challenger, Gray and Christmas, Inc., downsizings by U.S.-based employers slowed in August to 32,188 – a 29 percent decline from the 45,346 job cuts that occurred in July. The cuts are across multiple sectors.
The below table shows some of the job actions taken in 2016 by U.S. firms.
The shrinkage inside major enterprises has been ongoing since 2008. For example, the U.S. banks employ about 2.09 million people today, down from 2.21 million in early 2008.
RFG is now getting indications that companies have started clamping down on discretionary expenses. The CFOs, it seems, are already sensing trouble ahead and are preparing cuts so that they can weather the storm.
Summary
There are a number of global economic minefields lurking ahead as we complete 2016 and move into 2017.
There is no doubt the risk exposure is there globally and all business executives need to plan for it. Therefore, it is highly likely that most CEOs and CFOs will want to constrain IT spending – i.e., flat, down or up slightly, as well as discretionary spending.
For most companies it is now 2017 planning time; so plan accordingly.
IT budgets will not be immune to the cuts, although there will be some areas (such as security) where additional funds will likely be available.
Small business owners and IT executives will need to prove their business cases for projects and find ways to slice operations costs. Moreover, IT executives should expect to have limited options over the next 18 months as they work to meet new business demands, keep up with technology, and develop the skills needed to satisfy corporate requirements. It is time to innovate, do more with less again, and/or find self-funding solutions.
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