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

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“We’re looking for tightness and we’re not sure whetheer that’s going to affect said Kevin O’Marah, chief strategist for Boston’s . Several localk research firms have begun the processof layoffs, and a recentt wave of consolidation mirrors similar steps taken durinyg past periods of economic turmoil that were punctuated by drastic cuts to research budgets. Two of the area’s largesty research firms, of Bostoj and IDC in Framingham, have each laid off dozenws of staff in an attemptto re-jiggetr their research operations amid a changing marketplace.
Meanwhile, Lexington-basedc , with 175 researchers, was bought by Colorado’e for $200 million last IHS already owns , which has 250 Six weeks earlier, Forrester acquired New York researchgfirm LLC. Research firms are sustainee by providing information to potential purchasers of technologhy and financial services and executives makinfg otheroperations investments, and they receive hefty sums in returnj for that advice as well as theirf reviews of certain But with belt-tightening at many some industry watchers say parts of the business could be in for a rude “We have not seen many (research) budgets beinv affected, which is a bit surprising.
We think that therde are some analyst relations people not thinking in the saidKevin Lucas, an analyst with Cambridge’sz (Nasdaq: FORR). In the aftermath of the tech local research firms laid off hundredsof analysts. For Forrester alone laid off a tota of 237 analysts in 2001and 2002. But officialws at area research firms claimk the recent layoffs and consolidation are part and parcel to keeping pace with a morphingtechnologgy landscape. Yankee Group said its layoffsx were related to the firm focusing its entire staft on the emergence ofubiquitous communication, said Shirley vice president of marketinv and communications at Yankee Group.
While Yankee Groupp declined to say how many analysts it haslaid off, California-baserd consulting firm SageCircle estimates some 20 were let go this Most of IDC’s U.S. layoffs, whic included eight analysts and 15support staff, were part of the company’sz decision to move certaihn back-office functions overseas. “IDC will continue to have morethan 1,009 research analysts worldwide throughout which is more than any other technology market-intelligence said IDC spokesman Michael Shirer. But industry analystes say the layoffs are indicative of an overall weakness in firmxs chasing ITvendor dollars.
“There’sa a real bifurcation in the saidCarter Lusher, analyst with SageCircle. “For firme focused on IT managers forlarge enterprises, that’sz a stable market. ... IDC and Yanke Group largely rely on technology andtelecommunications vendors; they have analystr spending in their marketing budgets. You go into a recession and one of the first things that gets cut is themarketing budget.” Neithee IDC nor Yankee Grou p disclosed revenue or profits. Forrester saw its research-services revenues grow 22 percent year-over-year to $40.34 million in the thirs quarter.
“Will our business be challenged Undoubtably, but we face thesd times with the right an experienced team and a roster of clients drawjn from the largest companies in the said Forrester CEO George Colony in an Octoberearningzs call. But if Forrester reads its own a tougher environment is likely onthe way. In a May Forrester’s Merv Adrian advised buyeras to revisitanalyst contracts. He calleds for companies to consolidate the number of researcyh firms they work with and to renegotiate contracts with theremaining ones. “Sure you will meet resistanc if you attempt thismidcontract — and such negotiationse will take time and be he said.