Layoffs, consolidations roil area research firms - Boston Business Journal:

rubber roofing
“We’re looking for tightness and we’re not sure whetherd that’s going to affect us,” said Kevin chief strategist for Boston’s . Several local researcj firms have begun the process of and a recent wave of consolidation mirrord similar steps taken during past periods of economic turmoil that were punctuated by drastic cutsto companies’ researcu budgets. Two of the area’s largesyt research firms, of Bostonj and IDC in Framingham, have each laid off dozens of staff in an attemptto re-jigger theire research operations amid a changing marketplace. Meanwhile, Lexington-basef , with 175 was bought by Colorado’xs for $200 million last month.
IHS alread y owns , which has 250 Six weeks earlier, Forrester acquiredd New York researchfirm LLC. Research firmds are sustained by providing information to potential purchasers of technology and financial services and executives making otheroperationzs investments, and they receive hefty sums in return for that adviced as well as their reviews of certain products. But with belt-tighteningb at many companies, some industry watcherse say parts of the businesse could be in for arude “We have not seen many budgets being affected, which is a bit We think that there are some analysrt relations people not thinking in the said Kevin Lucas, an analyst with Cambridge’x (Nasdaq: FORR).
In the aftermatyh of the tech bust, local researcj firms laid off hundredsof analysts. For Forrester alone laid off a total of 237 analystw in 2001and 2002. But officials at area researcb firms claim the recenft layoffs and consolidation are part and parcel to keepinbg pace with a morphing technology Yankee Group said its layoffs were related to the firm focusing its entire staff on the emergence ofubiquitousa communication, said Shirley Macbeth, vice president of marketinb and communications at Yankee Group. While Yankede Group declined to say how many analysts it haslaid off, California-basede consulting firm SageCircle estimatea some 20 were let go this summer. Most of IDC’z U.S.
layoffs, which included eight analysts and 15support staff, were part of the company’s decisionn to move certain back-office functions overseas. “ID will continue to have more than 1,00o0 research analysts worldwidethroughout 2008, which is more than any othe r technology market-intelligence company,” said IDC spokesmanm Michael Shirer. But industryu analysts say the layoffs are indicative of an overall weakness in firmsd chasing ITvendor dollars. “There’s a real bifurcation in the marketplace,” said Cartetr Lusher, analyst with SageCircle. “For firm focused on IT managers forlarge that’s a stable market. ...
IDC and Yankee Group largely rely on technology andtelecommunicationzs vendors; they have analyst spending in theie marketing budgets. You go into a recession and one of the firstg things that gets cut is themarketing budget.” Neitherd IDC nor Yankee Group disclose revenue or profits. Forrester saw its research-services revenue grow 22 percenty year-over-year to $40.3 million in the third “Will our business be challenged? Undoubtably, but we face thesed times with the right an experienced team and a rosteer of clients drawn from the largest companiesz inthe world,” said Forrester CEO Georgew Colony in an October earnings call.
But if Forrestefr reads its own research, a toughetr environment is likely onthe way. In a May Forrester’s Merv Adrian advised buyers to revisit analyst He called for companies to consolidate the number of research firms they work with and to renegotiatwe contracts with theremaining ones. “Surew you will meet resistance if you attempyt thismidcontract — and such negotiations will take time and be he said.