NEW YORK (Bloomberg) — Executives in charge of technology spending may have to fire workers, delay projects and push suppliers for better prices as the credit crunch cuts corporate budgets as much as 20 percent, researcher Gartner Inc. said.

Technology spending growth may slow to 2.3 percent next year from more than 3 percent this year, the researcher said on Monday at a conference in Orlando, Florida. Gartner's worst-case-scenario estimate is down from an earlier projection of 5.8 percent.

The collapse of financial-services companies and a subsequent surge in borrowing costs prompted businesses to reduce spending and conserve cash, according to First American Funds analyst Jane Snorek. Cutbacks may hurt sales at companies such as software maker Microsoft Corp. and chipmaker Intel Corp.

"We face monsters today," Whit Andrews, a Gartner vice president, said at the event. "These are frightening times. None of us knows what is going to happen as events play out around us. Fear is inevitable."

More than 40 percent of firms have already reduced technology budgets and about 70 percent have tried to negotiate lower prices with technology-services suppliers, Forrester Research Inc. said last month.

Still, companies will not cut back as much as they did in 2001, after the dotcom bubble burst, Stamford, Connecticut-based Gartner said. While businesses in Europe, Japan and the US will keep technology budgets unchanged or reduce them, emerging markets will continue to grow.

"The brakes are being slammed, but we do not come to a halt," said Peter Sondergaard, global head of research at Gartner. "Unlike the dotcom bubble, where IT was perceived as wasteful, organisations now view IT as a way to transform their business."

The Standard & Poor's 500 Information Technology Index has fallen 25 percent in the past month before today, in line with the broader index. Worldwide, credit has gotten more expensive or dried up in reaction to fallout from defaults on subprime mortgages, making it difficult for companies to borrow money for projects or payrolls. The London interbank offered rate, or Libor, for three-month dollar loans rose to the highest level this year last week.