Is the credit crunch affecting IT?

Financial markets everywhere may be shedding value with nail-biting speed but the majority of UK IT departments are apparently still sitting pretty in the midst of global financial turmoil.

Asked 'how is the credit crunch affecting your IT department?', 41 per cent of respondents to the latest silicon.com reader poll said they are not, in fact, being affected.

Various predictions of how the credit crunch could adversely affect the UK's IT industry have been flying around of late, with recent surveys suggesting CIOs and contractors alike are increasingly worried about job security.

However there have also been suggestions certain areas of tech could actually do well in a downturn - including sustainable IT and outsourcing services.

For those in IT who are feeling the pinch already, staffing is one area looking shaky, with almost a fifth (18 per cent) of poll respondents saying they are changing their recruitment plans as a result of the credit crunch.

A further eight per cent said they are looking at more outsourcing/offshoring - and another eight per cent said they are renegotiating contracts with suppliers.

There is also cold comfort for new projects: 15 per cent of respondents said they are putting a hold on any new projects. Hardware and software upgrades, however, seem to be at less risk: just six per cent and four per cent respectively saying refreshes of these are being put off.

City IT workers are likely to be most fearful for their jobs as the financial crisis drives consolidation between surviving financial institutions. Big name mergers on the cards include Lloyds TSB and HBOS, and Merrill Lynch and Bank of America.

Meanwhile several tech giants have recently announced big staff layoffs - including EA which is losing six per cent of its global workforce, eBay with 10 per cent of staff and Yahoo! also shedding one in 10 workers.

Last month outsourcing services giant HP announced it is cutting more than 3,300 former EDS jobs from its UK workforce over the next two years as it completes the integration process around its acquisition of EDS.