For the last few months, reports have indicated that IT seems to be exempt from the dismal budget. But new reports are painting a different picture.


I’ve seen countless reports in the last few months proclaiming that, despite a dismal economy, IT jobs seem to be immune from downsizing. I read things were still rosy for IT because every business needs to keep the systems up, the processes moving, etc. In fact, late last autumn, in a survey conducted by Goldman Sachs & Co., IT managers said they expected to cut zero percent in-house staff.

But look how things can change. Now survey results are coming in that indicate things aren’t quite as optimistic as first expected. Here are two reports that I’ve seen just this week:

1. Advisory firm TPI, which tracks large outsourcing trends, released a report saying that the number of outsourcing contracts awarded in the first half of this year is the highest it’s been in more than 10 years. In fact, the value of those contract deals should pass that for all of 2004. While the folks at TPI were jumping for joy, what this means is that a lot of companies are outsourcing the responsibilities usually handled by their lower-level IT staff (all the stuff they can categorize as a commodity). In other words, lower-level help desk folks might find themselves in the firing rifle’s scope.

2. According to another survey released last week, this one conducted by Goldman Sachs & Co., CIOs are planning to cut IT jobs and start economizing on IT initiatives. These are the same managers that were polled in the report last fall.

The report indicates that contracted employees were at risk, with 48% of the respondents saying that those staffers would be cut. Thirty percent of the responders said on-site third-party service provider staffers would also be cut for application-related development or maintenance work.

And, lastly, the economy seems to be putting the kibosh on last year’s beloved keyword: innovation. With most of the budget being devoted to firefighting and just keeping the systems up, you can expect some technologies, like grid computing, open-source software, and cloud computing, to fall by the wayside.