Major job losses at Nordic IT services vendors have sent a shiver through the once-vibrant financial services technology sector but, while spending by banks has clearly slowed, it’s certainly not jobs carnage out there.
Helsinki and Stockholm-based Tieto said earlier in April that it planned to shed 150 jobs from its Swedish workforce of 3,200 as well 300 jobs in Finland from the 5,700 people it employs there and 170 in 10 other countries.
The announcement is on top of the 170 cuts in its Swedish workforce announced just two months ago, when the company also said it planned to axe 180 jobs from its sites in Denmark, Norway, Germany, the UK, Latvia and India.
Similarly, Norway-based IT services group EDB Business Partner outlined plans to cut up to 150 jobs as part of a NOK400m cost-cutting programme.
Yet, while the market is not what it once was, there is still activity, stresses Jan Arpi, chief executive of Stockholm-based software technology vendor Cinnober, with risk management experts particularly in demand.
“There is continuing interest in IT and technology upgrades for customers. But there is some hesitation around sealing new arrangements or licensing of products,” concedes Arpi.
“Decisions are taking longer to make and there is more preparation and counting going on beforehand. I’d say the big banks are spending perhaps 85-90% of their IT budgets on IT maintenance projects, which leaves only a fraction for innovation,” he adds.
“At the moment a lot of banks are treading water when it comes to technology spend and the job flow is fairly slow across the Nordic region,” agrees Julian Cooke, principal consultant at recruiter Hydrogen Europe.
“If you are trying to get a job now you may not necessarily need to take a cut but you are probably only going to be looking at like-for-like.”
But, with so many projects on hold, once the process of re-budgeting and re-prioritisation has been gone through, and assuming the wider picture brightens, we may yet see a flurry of activity later in the year, he predicts.
“I expect there should be some activity after the summer, so perhaps from the end of Q3 and into Q4. I think there will start to be movement in the area, although it is not exactly clear yet what that will be,” he says.