It has been revealed that IT budgets are being cut by around 10% across the board despite corporate technology leaders being given assurances to the contrary. Department heads who were given a ‘finalised’ budget have found that the budget has now been cut further. This has been accredited to higher levels of management having a deeper understanding of the ongoing effect of the economic slowdown.

These further cuts are believed to be affecting around 46% of CIOs across all sectors and are based on figures from the first three months of this year. The indication is that the majority will reduce their spending on IT by at least 7%.

Gartner’s analysts have been comparing how IT budgets are doing during this recession against the prediction back in December that they would weather the storm. Back then, most CIOs stated that they would effectively freeze their IT budgets for the year, indicating a tiny increase of 0.16%. This has been the case for half of CIOs but with an equal number now cutting their budget, this results in an overall reduction of 4% on IT spends across the sector.

According to Gartner, a reduction in headcount and renegotiation of contracts with external workers would be top of the list in terms of cost cutting. SQ Personnel’s Bernie Potton commented that he would expect to see, “much belt-tightening” in companies that use IT contractors over the next few months. He continued, “I think the view that the [IT jobs] market may have reached its bottom and is beginning to turn is based on optimism rather than any firm figures or facts. We are still finding our PSL clients not doing much recruiting, permanent or contract, with the obvious difficulties in opening up new clients when they’re not recruiting too.”

Thanks to Contractor UK for the initial report.

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