Economic Downturn Forces Many Big U.S., European Companies to Cut IT Spending

Economic downturn forces many big U.S., European companies to cut IT spending

LOS ANGELES, Sept. 9 (Xinhua) — The economic downturn has forced many large U.S. and European companies to cut their technology budgets this year, according to a report released on Tuesday.

Among large U.S. and European companies surveyed by Forrester Research Inc., 43 percent of them have cut their overall spending on technology products and services in 2008, said the report.

Most of the companies cutting IT spending are in the financial services, utilities and telecommunications industries, said the report released by Forrester Research Inc.

Some companies, meanwhile, have put discretionary spending on hold and others are planning to negotiate lower rates for information-technology services, according to the report.

Forrester’s survey found that the effects of the economic downturn varied by geography and by sector. U.S. companies were more likely to cut their budgets than those in Europe, for example.

The survey also found that while companies in finance, utilities and telecom are tightening their belts considerably, those in media and entertainment are spending more.

Forrester said in February that it expected tech spending to grow 2.8 percent this year, marking a significant downward revision from a December 2007 forecast of 4.6 percent growth. The research firm said it was reviewing its annual technology spending forecast, although it would not change it.

With 19 sales locations worldwide, Forrester Research Inc. is an independent technology and market research company that provides pragmatic and forward-thinking advice to its clients.

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