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Xerox chief warns companies cutting spend on IT projects
By siliconindia
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Friday, 11 January 2008, 18:47 IST
New York: "Fallout from the sub-prime mortgage crisis and concerns about a U.S. economic slowdown are causing companies to do a rethink about spending on big IT projects. Such a situation will badly affect sales growth of technology companies," said Anne Mulcahy, Chairman and Chief Executive of Xerox, a U.S. documents company.
Mulcahy told Business Standard, "The hurdle rate for making investments has gone up in general." She thinks heightened anxiety is one of the factors that obstruct investment in the U.S. This has resulted financial services industry tightening their belts there.
Foreseeing the situation, John Chambers, Chief Executive of Cisco Systems, the networking company, said in November, that the company had experienced 'softness' in orders from big U.S. customers, especially financial services firms, many of which have been lumbered with big write-downs triggered by the credit squeeze.
Anticipating a drop in tech spending, technology stocks have witnessed a fall in recent weeks. The technology heavy Nasdaq index fell 3.7 percent on Friday. In spite of Mulcahy's bearish outlook, she stressed that Xerox was well positioned to weather any storm.