Here at Computing, we have reported on the reaction of the IT community to the economic downturn from a number of different angles - but the tone of the conversation has changed quite considerably in the past couple of months.

From asking whether the crunch would affect the industry in February, we moved on to giving practical advice to managers on how to survive the recession in April. While analysts are trying to make some sense of the situation to translate it into numbers and trends, the simple conclusion is that the crunch is already here for the IT sector.

At a recent industry event, Gartner research vice president for emerging trends Mark Raskino gave practical advice to some 200 chief information officers. He highlighted that IT leaders “must not panic [about the implications of the downturn], but should act now” and “do not wait for instructions or permission.”

The analyst then moved on to suggesting a range of different shapes and sizes for possible IT-driven business decision plans, all of which advised IT directors to keep IT costs in trim “to avoid knee-jerk decisions later”.

But when Raskino asked the managers present whether their budgeting plans had changed at all as a consequence of the downturn, only a handful of candid leaders raised their hands, including Del Monte Foods IT director Mike Proudlock. I was seating next to a former CIO of a large financial services company, who whispered to me: “I am the living proof of cost-cutting…” He did not raise his hand, though.

For this article, we had a couple of out takes due to the broad “survival guide” nature of the copy, but when we asked where the cost-cutting actually starts, reducing staff overheads was a common answer from IT decision makers. Former Egg chief information officer Tom Ilube said that slashing workforce, as well as focusing on systems aimed at rationalising staff resources, would be near the top of the list of priorities during tough times.

News of lay-offs in the industry have already started to hit the headlines, with supplier Logica CMG planning to axe 500-or-so UK jobs to reap £80m in savings and “revitalise the business”. Speaking of revitalising, we interviewed Royal Mail’s CIO Robin Dargue last week and found out more about his transformation plans. Dargue has a large chunk of a £1.2bn budget to spend on technology, but when it came to evaluating his skills base, he chose to retrain around half of a 300-strong IT workforce.

In the current economic climate, IT capability reviews - such as the one carried out by Royal Mail - may become a trend. But companies should be undertaking such reviews anyway, said Marilyn Davidson, director of the Association of Technical Staffing Companies (ATSCO).

“There is a possibility that the downturn will force employers to undertake such reviews. But businesses should always ensure that their skills base is fit-for-purpose and keep expertise within the business to remain lean, mean and more competitive,” she said.

The way in which IT leaders manage cost-cutting processes – especially in the human resources field – is a delicate issue. If things worsen and “mean” reviewing processes are carried out, we may see some “grilling” of businesses by workers unions in the not too distant future.

By Angelica Mari