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Financial industry turmoil: What's in store for IT workers?

Thomas Wailgum | Sept. 22, 2008
The higher the IT worker sits in the hierarchy, the worse his chances of keeping his job.

And then there's the loads of speculation and angst surrounding Deb Horvath, CIO of Washington Mutual, and her IT staff. WaMu just replaced its CEO, had its debt ratings reduced by Moody's Investor Service and Standard & Poor's, and, according to a New York Times article, is trying to sell itself to Wells Fargo, JPMorgan Chase or HSBC.

"The unsurprising announcement," notes the Times article, "comes as the bank, which has suffered badly from losses on mortgages it had made, continues to stumble."

Survival of the Fittest

Those at the top of the food chain-the Sanzones and Horvaths-most likely will receive million-dollar payout packages if they are asked to exit their companies. (A Merrill Lynch spokesperson declined to comment or make Sanzone available for this story. Washington Mutual and Horvath did not return a request to comment for this story.)

"What you'll see now is that this is where the haves and the have nots get separated," says Lewis, referring to those IT executives who have contracts and the staff who are employed at will. "The senior people are all going to be cashing out on their golden handcuffs."

Lewis is less optimistic about rank and file IT staff. In an acquisition, like Bank of America's proposed purchase of Merrill Lynch, "typically what someone should be nervous about, at lower levels, is this: Are you one of the top performers?" he says. "Because if you're in the top 50 percent of performers at either institution, and you're in the lower level of IT, your job is probably safe."

The higher the IT worker sits in the hierarchy, the worse his chances of keeping his job. "If you're a high performer at the high level [of IT], it doesn't really matter if you're a high performer or not: only one person wins the top job," Lewis says. "They don't usually keep two heads of application development."

And, as in the case of executives like Sanzone, who's been tremendously successful, Lewis says, "they don't usually keep two CIOs."

 

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