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Layoffs finally hit IT workers

Layoffs are finally catching up with IT workers. Last year, IT departments were resisting layoffs and focusing on reducing spending but this year they’re cutting staff as well, according to a recently released study on IT spending and staffing from research and advisory firm Computer Economics.

About 46% of IT organizations plan to reduce headcount this year, up from 24% last year, according to the report which surveyed 200 IT executives in the U.S. and Canada. Computer Economics has conducted this report annually for the past 20 years.

While the layoffs don’t seem to be any worse than the layoffs that are happening in the rest of Corporate America, they do vary by industry. Retail is racking up the most job losses with a decrease, at the median, of about 8% of budgeted IT staff levels from the prior year. Similarly, IT employment in discrete manufacturing is down 5% and there’s been a 3% drop in the insurance industry.

Yet, IT workers in healthcare and utilities are faring a bit better than their counterparts in other industries, according to the report. Nearly 63% of the respondents in the healthcare sector said they were increasing IT staff this year. Similarly, about 50% of organizations in the utilities and energy sector reported plans to increase staff.

Contract workers also appear to be making gains in the IT departments of large organizations. They now account for about 10% of the headcount in large organizations with at least $1 billion in annual revenue, up from 5% last year. (BusinessWeek)