Tuesday, July 22, 2008

IT jobs will drop in 2009

IT staff jobs are at increasing risk -- both for contractors and in-house workers -- according to a survey of top CIOs by Goldman Sachs & Co. released last week. Global services companies will also feel the pinch because of the slowing economy.

A second survey showed that basic PC and network hardware, as well as professional services providers, would bear the largest proportion of spending cuts. It also showed that CIOs planned to emphasize economizing measures over investments in new technologies, with cloud computing emerging as the last item on their priority lists, despite the hype around it.

"Demand for discretionary IT projects dropped to its lowest point" in the 41-study history of the Goldman Sachs staffing survey, which asked 100 managers with strategic decision-making authority (mainly CIOs at multinational Fortune 1,000 companies) about their IT staffing plans for 2009.

The Sachs report states that "in a cost-constrained IT budget scenario, CIOs will most likely look to cut their resources first from lower-value augmented [contract] IT staff." The company also describes its survey as "an early warning flag" for service providers' 2009 bookings of new projects.

These intended cutbacks are a change from last fall. When the managers were asked in October which area of IT service delivery resources they would cut for application-related development or maintenance work, the answer was 0% for in-house employees. However, with a declining economy, 8% of respondents in a February survey said in-house IT programming staffers would be cut. In April, 15% of respondents said in-house staffers would be cut. That dropped to 11% in the June survey (the most recent).

But contract employees fare much worse. In the survey, 48% of the respondents said that those staffers would be cut. And 30% of the responders said on-site third-party service provider staffers would also be cut for application-related development or maintenance work. Twelve percent of the managers said they would cut employees from offshore third-party service providers.

Study: IT jobs will drop in 2009
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