IT companies in Romania might face serious defaults because of the financial crisis, mainly the small outsourcing companies, as well as those depending upon a reduced number of clients, said Radu Georgescu, chairman of Gecad group.

“Other crisis effects could be unemployment growth, including in IT industry and a slight pay reduction as a result of the job cuts. Anyway, the most unpalatable scenario would be from our point of view a decline in demand for our products”, said Georgescu.

He emphasized that, once the companies will operate cuts into their budgets, including the IT spending, demand for IT products and services would slump. “In 2009, a shrinkage of 25-30% is expected in big companies’ IT budgets worldwide”, stressed Gecad chairman.

According to his statement, the group has not given up the expansion projects, but the 3-6 months to come are not favourable to major investments, such as new offices opening or stock exchange floating, due to the international crisis.
“We will intensify plans to expand on some other markets, both through partners, and directly.
We will attack lower-risk markets and in a few years we are to focus on the markets currently inrecession, but which are expected to recover”, pointed out Georgescu. 

In his opinion, this crisis has a positive effect on companies because the offer on the labor market will increase. “Now it is easier to find staff, especially on the markets where recession is already felt, as it is the United States. Moreover, in Romania the staff reductions operated by many companies are starting to be felt and the number of available specialists is on the rise. On the other hand, we re-entered normality after last year, for instance, pay demands attained unrealistic levels”, added the group’s chairman.

In conclusion, Radu Georgescu appreciated that an economic recovery worldwide is likely in 2-3 years time and that will be a slow process.
Programmers in Romania are to be exempted next year of the income tax, as well, because this facility will continue to be applied in 2009, announced on Wednesday Minister of Economy and Finance Varujan Vosganian.

For the first time, in 2001, the government decided to eliminate the income tax for the companies in the software industry field which employed certified staff (analyst, programmer, IT system designer, IT consultant, IT system engineer, data base administrator, software engineer and IT project manager), Ziarul financiar reports.