IT Staffing Hits the Fan: Cuts Likely in 2009

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Earlier this month, I cited new data from the National Association of Computer Consultant Businesses that indicates IT employment in the U.S. hit an all-time high of 3,907,800 jobs in June, following the addition of 90,000 IT jobs over the previous year.


This seemed to confirm IT's relative imperviousness to the sagging economy, which I wrote about in March.


But new research from Goldman Sachs & Co. shows that while IT professionals may be less exposed to economic woes than folks in other industries, they shouldn't assume their jobs are secure. According to a Computerworld story about the research, a growing number of companies are considering making cuts in IT staff in the coming year.


When surveyed in October, no IT managers were planning to eliminate in-house staff performing application-related development or maintenance tasks. But 8 percent of respondents to a February survey said they planned to cut in-house programming resources, and that number grew to 15 percent in April. In the most recent survey, administered last month, the number of managers planning such cuts had dropped slightly, to 11 percent.


Though it might be of small comfort to nervous developers, managers were more inclined to cut contract employees (48 percent); on-site, third-party service providers (30 percent); and offshore service providers (12 percent).


The likely reason for cuts: Goldman Sachs & Co. said demand for discretionary IT projects fell to its lowest point ever in 41 iterations of the survey.


Another possible positive for IT staffers is found in a second Goldman Sachs & Co. survey referenced in the article, in which 42 percent of CIOs copped to being "reluctant to spend money on third-party professional services." This sentiment seems to indicate that companies will rely on in-house staff for necessary services rather than outsourcing them.