IT workers could be spared in the recession

Analysts predict slowdowns in new spending rather than sweeping job cuts for IT departments

Corporate IT departments could be spared from the job cuts that will hit other business operations, according to one analyst.

Joe Pucciarelli, technical financing programme director at IDC, told reporters in San Francisco that IT operations have become such a central part of so many organisations that they will not take a major hit.

"We are going to see a slowdown, but we are not going to see spending fall off a cliff," he explained.

Pucciarelli's comments came during a rollout of HP's latest line of business transformation outsourcing software and services. The analyst believes that, while the market for such IT products could shrink, it will not dry up all together.

"Chief financial officers [CFOs] are saying that we are going to take an organisational time out. We are going to slow down obvious expenditures and we are going to reassess," he said.

As such, Pucciarelli expects to see hiring freezes and slowdowns in new spending rather than sweeping job cuts for IT.

However, the analyst warned that convincing executives to sanction spending on new IT projects could become more difficult. Scepticism, and a reluctance to put money into expanding or overhauling IT, could demand that new projects yield much higher returns than were previously expected.

"CFOs are very conservative people; they have very long memories," said Pucciarelli. "I predict that they are going to hold these thresholds for two to three years after the credit market returns to normal."

IT managers are urged to re-examine the way they pitch new proposals to executives, and start to suggest new projects in terms of simple dollars and cents.

"Don't tell me how much the new technology can do, tell me how much I can save by buying it," said Pucciarelli. "That is going to be the investment strategy inside all companies for at least the next two years."