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Danger of staff cuts going too deep

Simon Quicke

The temptation to panic at the sight of a downturn and make drastic cuts in staff might undermine the chances of a recovery in the tech sector.

Numerous companies across the channel have swung the axe to reduce head count in attempts to reduce expenditure with Fujitsu Service the latest with the announcement of a 1,200 workforce cut yesterday.

But according to recruitment specialist Computer People the cuts many have made have been too deep and the IT job market is showing signs of recovery.

Over the past 18 months there has been a 45% drop in the number of permanent vacancies but the recruitment agency said temporary positions had held up and now full-time positions were coming back.

The haste to cut head count to reduce costs has seen 60% of UK companies cutting staff and 65,000 going in the IT sector and firms will now need to rebuild their work forces.

"They should treat this as an opportunity to re-build their old workforce rather than replace numbers like for like," said Sid Barnes, a director of IT recruitment specialist Computer People.

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