When enterprise IT departments have to make cuts of over five per cent of their budget, they’re most likely to reduce staff, cut salaries, and eliminate vendors and outsourced contracts to achieve targets, says an Info-Tech Research Group study conducted this summer. Companies in the health care, transportation and manufacturing sectors in particular frequently achieve any necessary budget cuts through layoffs, citing rising fuel costs as a key driver for cost-cutting.
The Info-Tech study conducted this summer involved 167 surveys and 60 personal interviews with senior IT leaders at companies from a diverse mix of industries, primarily in the U.S. and Canada. Companies surveyed said that IT staff reductions have typically been comprised of:
-- 44% entry-level and intermediate employees;
-- 19% management staff;
-- 17% contractors;
-- 15% senior staff; and
-- 5% consultants.
While cutting staff and salaries can deliver quick bottom-line benefits, reductions can also have a negative impact on morale of remaining staff and their ability to maintain IT service levels. As well, revenue-generation of the overall organization is negatively impacted in one-quarter (24%) of businesses surveyed.
Companies facing cutbacks should carefully consider all aspects of their business and their IT department spending to make wise decisions, says Info-Tech. Companies can often avoid large-scale layoffs if they implement staff training enabling employees to cover multiple functions and make staff cuts gradually, but that requires advance planning and best practices over time.
More information on the IT industry can be found at www.supportindustry.com
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