IT Recovery Will Cut Jobs, Gartner Predicts

By Tom Steinert-Threlkeld  |  Posted 2002-10-08 Print this article Print

Online exclusive: The technology consulting firm says the world's biggest companies will shed staff through 2010 as efficiency efforts pick up steam. That prediction was among Gartner's Top 10 IT forecasts for the rest of the decade.

LAKE BUENA VISTA, Fla.—Forget the jobless recovery. Get ready for the job-reduction recovery.

Expect in fact that millions of jobs will be cut by the 2,000 largest companies in the world, through the end of this decade, even when their growth and profits pick up, said Carl Claunch, vice president and a research director with Gartner Inc. at the technology consulting firm's fall Symposium/ITxpo here this week.

Since economic recovery will be based on increasing productivity and improving the efficiency of business processes, the largest employers in the world will be shedding workers, even as they boost sales, said Claunch. In effect, they will be substituting information technology for labor.

"When you switch on the new process, those people aren't needed," Claunch said.

The automation of business functions now extends not just to back-office processes, like billing, or front-office functions, such as serving customers, but to dealing electronically with suppliers and partners in an "ecosystem" or entire industry.

For companies who are major players in such ecosystems, the cutbacks will be signficant, Claunch said. He forecast that the 2,000 largest global companies will have 10 percent fewer workers on their payrolls by 2005, and 30 percent fewer by 2010, even as their revenues grow.

This shift will have a harsh effect on workers, particularly at the lower levels of organizations. Often, they will be the very employees who helped bring the new electronically managed process into place.

The question then becomes: "Can you retrain them, repurpose them, at least give them advance notice?" Claunch said.

Tom was editor-in-chief of Interactive Week, from 1995 to 2000, leading a team that created the Internet industry's first newspaper and won numerous awards for the publication. He also has been an award-winning technology journalist for the Dallas Morning News and Fort Worth Star-Telegram. He is a graduate of the Harvard Business School and the University of Missouri School of Journalism.

Submit a Comment

Loading Comments...
eWeek eWeek

Have the latest technology news and resources emailed to you everyday.