In October, CIO Magazine surveyed its small but exclusive group of IT executives for the third time in 2008 and discovered that the outlook of these tech leaders has taken a sharp dive, with 40% now expecting to cut their budgets. In March, 17% of CIOs said they were planning cuts and in July the number was up to 26%.

One of the CIOs surveyed, Rick Belmonte from Lowe Enterprises, said, “Until September, we thought the economy would recover in the back half of 2009. Now, not a prayer.” Belmonte has decided to delay all major IT projects until 2010, including a new Oracle project management system and a Hyperion forecasting application.

Belmonte has also cut his IT staff by 20% and is concerned about losing some of his best IT professionals since they’ll be stuck with maintaining established systems for at least the next year and won’t have any new projects to get excited about.

Here are some other interesting takeaways from the 243 CIOs who were surveyed:

  • Respondents reported that average IT expenditures were -3% in October (it was +3% in July and +7% in March)
  • 37% will cut software costs, 36% will cut hardware costs, and 33% will cut outsourced IT services
  • 49% have already postponed discretionary IT projects, and another 23% are planning to postpone discretionary projects
  • 46% have put a freeze on IT hiring, while 23% have already started reducing IT headcount in the past six months
  • The good news is that 66% of respondents say they are not planning to further reduce headcount

Read the full report and the companion article.