In-Depth

IT Hell: How the Recession Has Affected IT Jobs

Readers share their tales of woe, survival and redemption from the great recession.

• By Doug Barney
• 06/01/2010

John Doe had what he thought was a terrific job -- director of IT services at a Canadian college -- but then a new college president came in, changed the school's mandate and forced the IT department to cut spending from $8 million to a crippling $6 million a year. It was a 25 percent cut in one whack. At the same time, the IT staff was reorganized and services were cut.

Doe moved on and became manager of IT operations for a small 6-year-old company that dealt with hospitals. The IT operations were "extremely efficient," according to Doe, but not efficient enough for senior management, which hired an outsider as CIO, bypassing Doe's then boss, the IT director. Then things went south.

The CIO quickly cut the 12-person staff, reversing existing plans to expand the IT team. "It was bad enough that I lost two people, but I found out about the cuts only as [the employees] were being walked out the door," Doe says. "To really add insult to injury, the CIO started taking over the responsibilities of the director. The final cut was me.

"I had presented to the CIO a plan for developing the data center over the next two years to save money and position the company for the future," Doe continues. "The plan was accepted in full. The next day, I was advised my position had been eliminated. The company ended up trading in a manager -- who made around $90,000 -- for a CIO at $180,000, and got no added value, but reduced the already overtaxed IT support available to the company."

Doe is now not just 0 for 2, but has been out of work for the better part of two years. How does he keep his head up? "I don't," he says. "My savings are gone, credit cards are maxed out, and I've unlocked my locked-in pension plan and cashed it in. I'm depressed."

Doe may be down, but he's hopefully far from out. "I try to keep on top of what's happening in IT through newsletter subscriptions and webinars," he says. "I'm also working on ITIL certification, which I'll get as soon as I can scrape up $200 for the exam."

We heard from Doe after Redmond asked readers how the recession has impacted their shops and lives, and how they -- hopefully -- have made it through. Your experiences include doing more with less, laying off workers, being laid off and innovating in the face of budget dearth.

Obviously we can't tell all of your stories, but thanks go out to each and every one of you who responded. Due to company sensitivities, the majority of the readers whose stories are included preferred to be anonymous.

Pinks Slips and Seeing Red
Another academic IT pro -- let's call her "Sue Smith" -- survived the recession with her job intact, but now runs a shop teetering on collapse. "We've been laying people off for three years running as part of major budget contractions year over year since 2003," Smith says. "The layoffs were a last resort, given that I place a high value on people, both technically as employees and ethically as human beings," she adds.

These cuts have a real impact. "[Some] services have been completely cut; other services cut back; some services outsourced," Smith elaborates. "I've terminated all software maintenance contracts of any kind. We no longer pay the yearly fees that make us eligible for upgrades or fixes. That alone would be considered malfeasance in most IT shops. We're now below what I call the threshold of sustainability. Permanent corporate knowledge has been lost, and some form of economic recovery, such as my budget going back up, would be insufficient. I'd need to start most things over again as if they were greenfield projects."

Ed Bailey, a network administrator at Carrier Great Lakes, is also constrained, but finding new ways to expand functions.

"We're staying afloat, but over the past two years I've been able to get the company to keep investing, albeit in just the absolutely necessary items," Bailey says. "PCs and laptops are being repaired versus replaced. We've migrated to mainly virtual servers, so over the past couple of years the hardware replacement costs have decreased. Things like getting layer 3 switches are not happening at this time."

Shrinking budgets can also serve as a negotiating tactic. "We leveraged a pay-for-services contract with our telecom vendor and renewed at a lower price," Bailey says. "They're footing the monthly cost of leasing a new phone system with a $1 buyout at the end of the four years. That allowed us to migrate to a MPLS system and improve data connections to the remote locations, and lower overall costs."

And while one-fifth of company employees lost their jobs, Bailey, a one-man IT operation, survived. "With me being a one-man show and no one else having a clue as to what and how everything happens behind the scenes, I guess they feel I am a needed position," he explains.

But layoffs affect survivors, too. "I feel very sad for them and sad for our organization," says a reader who wishes to remain anonymous. "It's depressing to everyone. We've been through many rounds of layoffs. We're long past the point where anyone could rationalize that there might be some dead wood to be trimmed. Anyone who gets laid off now is a very experienced, excellent contributor who takes years of valuable knowledge out the door with them. Their loss diminishes us. There's no shame now; we're survivors."

Dr. Dave Dyer, who runs Dr. Dave Dyer Business Optimization, has been laid off from two IT jobs. Now he knows what it feels like to wield the ax. "My first experience on the other side of the desk came when the board of directors mandated a 10 percent reduction in staff," Dyer says. "It was only five people, but which five? The decision process was a prolonged exercise in agony. After my final decisions were made and reported, I remained depressed and sleepless until that horrible Friday. While other managers finished their notifications in minutes, mine seemed to take forever. That night, knowing those talented and dedicated employees were lost, I cried myself to sleep."

You can try to avoid the pink slip by staying current. "Recently, I was forced to lay off three people," says Joe

Johnson. "One was an 18-year veteran of the company. She's a great person, but allowed her skills to get rusty and did not take the initiative to continue learning, adapting and changing. Her excuse was that the company didn't pay for training for her -- which was the truth -- but when it comes to going to your next interview, they don't care that your last company didn't pay for adequate training. That's a hint to everyone out there: Keep up-to-date, even if you have to pay for training classes, seminars, certifications or education on your own."

Muddling Through
Not all shops have been decimated, but nearly all have had to do more, or at least as much, with less. Though there were no layoffs, "Ted Thomson" suffered through a year without raises. His team made it through by keeping its computing jalopies running with duct tape and bailing wire. In fact, Thomson's work PC is more than 5 years old. To keep things moving, Thomson is eyeing open source.

"I've found good ones such as m0n0wall for our firewall and other useful software to fill the gap caused by our lack of budget," he explains. "I also found a commercial e-mail server product, Kerio [Connect], that was powerful and yet relatively inexpensive, especially compared to Exchange -- even hosted Exchange. Our ROI with this change will be less than a year compared to what we were paying. The one thing this is doing is forcing me to look beyond the status quo. It has forced me to examine whether remaining with particular software or a solution makes sense."

Dave Morse, a senior technology analyst for a California government agency, is likewise keeping older machines running, even as he helps build a new electronic medical records system funded with federal stimulus money. "About five years ago, we changed our PC replacement policy from new every three years to new every four years," Morse says. "When the next budget cycle came around, the decision was made to stock up on a few spare parts, repair what we could, and replace any broken machines that were off warranty."

The result is that many company PCs can't run new software such as Windows 7, Office 2007 or new versions of line-of-business apps. "We've had to increase memory to get a year or so out of 4- and 5-year-old PCs," Morse says. "Management is quite aware of the age of our PCs and the fact that we have to replace more and more of them as they age. They see this as an acceptable risk and cost, and are now waiting for the final design of our incoming electronic medical records system to determine our future PC requirements."

"Bob Brown" has a simpler approach to managing his budget: "Spending priorities are very simple. If it costs money, I can't do it. It's amazing how much this simplifies things," Brown says. "It also forces you to get creative. Training? Nope. Not unless it's free training. Typically I accomplish this through Web training sites or product demos where vendors train you in an effort to get you to buy or buy more."

So what about new projects? "Only if you can accomplish it by repurposing old equipment or with resources already underutilized within your control," Brown responds. "Basically, my time is already budgeted and paid for by the company. If I need new resources, figure it out for free or it's a no go. Simple. Of course, then there are the high-priority, must-be-done types of projects, but those are simple, too. Go to the requesting business unit and tell them: 'You need it, you buy it.' Only then can I provide it."

A Moral Question
Tony Sheehan, owner of Evolution Bites, runs a two-person sales and support operation. With business down during the recession, Sheehan thought about laying off his one employee. He came up with three reasons not to. One: "Employees have mouths to feed and mortgages to pay," he says. Two: "Could I replace her when the work returns?" And three: "By sacking staff, am I contributing to the downturn?"

Sheehan made what he believes was a wise choice. "I chose the high road," he explains. "I'm trusting that things will improve sooner rather than later. As long as I can keep our head above water, we'll both benefit in the long run."

Robert M. Stewart II of Alert Computing LLC, which builds custom servers, faced a similar dilemma, but the thought of pink slips never crossed his mind. "There's no such thing as a pink slip in my world; there are only salary increases," Stewart says. "When things became a bit queer in the IT world, I simply stopped paying myself and gave my friends an increase in salary. Why did they all of a sudden look for other avenues of revenue for our company?" he asks. "When you take care of the best IT people in the world and pay them much more than what is alleged to be 'market value,' they tend to produce."

Educational Impact
The disaster that is the California state budget is well-known. For those in the trenches like Randy Smith, a computer class teacher at Monterey Peninsula College, the impact is direct.

"Even though community college teaching is the most cost-effective approach to higher education for career technical preparation, our resources have been decimated," Smith says. "The pretense for the state is that vocational programs will be spared or the last to [be] cut. But the reality is that we're the easiest target when they need to scale back something. Computer classes are an easy target, and with a college funding cutback of approximately 4 percent, we've seen this semester's offerings slashed 34 percent and next semester's by 9 percent."

Smith adds: "This can be devastating to our programs, especially at a time when four-year colleges are turning students away and the community colleges are flooded with demand."

Is Consulting for You?
Consultants can be IT people, too. And in this economy, there's good news and bad news for them. Unified Communications consultant "Paul Parker" sees plenty of opportunities for consultants, and recently had three job offers in one week. In fact, because internal IT groups are understaffed, consultants are seeing more billable hours, to the extent that they barely have time to meet demand, he argues.

"Benefits have been cut, training budgets have disappeared and people who left haven't been replaced. So instead of enjoying being 70 percent billable with great training, I'm 90 percent billable with the only breaks from billing being vacation and sick days," Parker says. "Luckily, we've only seen a few people leave because their jobs were eliminated. These were mostly consultants who were not billable because of lack of training, or because they specialized in areas outside the core business of our consulting practice."

He continues: "As a consultant, the only time I see my peers is usually at company meetings and during training. With everyone focusing on billing, the meetings have turned into e-mailed PowerPoint files, and instead of attending the weekly training via Live Meeting I'm watching the recording on my own time."

While consultants love billable hours, there are frustrations involved in dealing with undermanned IT staffs. "When going on-site for a project, the clients' teams usually don't have the manpower to perform their tasks," Parker explains. "So I either get to add a change order to pick up their tasks, or I have to wait for them to get their tasks done. This is hard, as I'm usually scheduled two to six weeks out, and delays either put non-billable hours into my schedule or cause conflicts with future projects."

Not all consultants had it so good -- at least at the beginning of the recession. "My firm does high-end training, mentoring and consulting services for the Microsoft data management platform. We're not IT, but IT is often our customer," says Douglas McDowell, CEO of North America for Solid Quality Mentors. "January through June of 2009 was pretty scary. IT freaked out and almost completely turned off the faucet. Training was almost non-existent; mentoring was close behind; and consulting was only on a critical basis."

He continues: "Then we saw new reasons that our firm was engaged. People were laid off, so those left needed training to do the others' jobs; or one company was purchased and there were new, urgent data-integration issues or server-migration needs. Starting mid-year, everything that was ignored by IT started to break, and the phone started ringing and projects that were put on ice were suddenly six months behind and still needed. Then the early adopters got interested in Office 2010, SharePoint 2010 and SQL Server 2008 R2, so that the niche work we do started cranking up. 2009 ended much, much better than it began, and things are continuing to trend up."

While many consultants have it good, there's increasing price competition. "I've been self-employed with my own business since 1988, so I haven't been touched by many of the [recent economic issues]. But I've been affected in that many of the people who have been laid off are now out there chumming for business and offering to do work at ridiculous prices," says Mathew J. Brock, with Computer Solutions in Arizona. "I see flyers posted in turn lanes by a guy who will fix any problem with your computer for a $50 flat rate."

Some clients ask Brock to match these rates. "They ask me if I think they're rip-offs," he says, "and I tell them honestly I don't know -- but there's no way I can work for that little."

It's All About Attitude
Most Americans know the Joseph P. Kennedy saying: "When the going gets tough, the tough get going." That attitude is essential to IT survival in tough times. And it means taking control of your own destiny, as "Mark Meyer" has done. When times are tough, Meyer retreats to the "safety" that is the technical aspect of IT work.

"It's a 'head in the sand' attitude, but on the other hand, it's best to not sweat the stuff you can't change," he says. "I get to go home at the end of the day feeling good about what I did, even if I don't know if I will have a job next week."

Meyer also tries to stay ahead of the market: "I consider myself a professional and try to act that way, even when my employer sometimes treats me like I'm just part of a headcount," he says. "I'm responsible for my own training and education and career development. I work hard at staying on top of the continually changing technology map. When times are really tough, I can console myself by saying that my skills will be current and marketable."

Michael H. Bartlett, with Quantum Marine Engineering of Florida Inc., also looks ahead in the face of adversity. "I focus on the future," Bartlett says. "It's my job to be evangelical and lead, not cower in the corner keeping my head down. I need to find ways to either save money or increase the value of a service or application without increasing the financial investment."

Bartlett used that attitude to negotiate a deal with a new mobile carrier, which gave him better devices, a free copy of BlackBerry Enterprise Server, new services such as video and faster provisioning. "We didn't save cash, but if we become more effective and efficient we're getting more return on the investment," says Bartlett.

For some, a bad economy is actually a great opportunity. "IT gets squeezed when it's just another overhead cost," says reader David B. Moens, a senior systems analyst. "When IT is leading genuine transformation within an organization, it becomes a strategic investment with measurable return that smart companies continue to feed even during lean times."

Non-Profit Refuge
For the last decade, countless people have told Redmond reader Gerry from Louisville, Ky., to leave the world of non-profits for the more lucrative commercial sector.

"I've had to endure the shaking of heads, the clucking of tongues and the looks of pity," Gerry says. "Head hunters contacted me with positions in the private sector, but I was leery of layoffs. I'm as greedy as anyone, but luckily I've been through enough job turmoil in my life that I saw it coming this time."

He continues: "Now, some of those companies have already started laying off or cutting pay. People I know who were making the big bucks are now looking for work and what they were able to save from that extra income is running out fast."

Microsoft Suffers, Too
IT groups with budget challenges are less likely to upgrade to newer Microsoft wares. But those charged with selling software are backing off as well. Australian reseller Ken McAvoy, of Ramnet Computing in Melbourne, has seen business tank. "Most of the mainstream companies here stopped hiring; projects were suspended or put on hold and contractors became taboo unless you happened to be in a niche market where your expertise was core-essential," McAvoy says. "For me, that has represented a 70 percent drop in available work and equivalent profitability."

He continues: "I've stopped selling or supporting higher-level Microsoft products, as one person simply can't keep up with the technology -- half of which I no longer understand anymore. Now I'm consigned to getting a living from selling hardware and software and providing the general array of support services when it breaks down. Thankfully I have investments in stocks and access to monies from a former full-time job, so I survive -- without that as a backup, I'd be starving and desperate," he says.

Budget uncertainty, not just budget cuts, also hurts IT. "[Some] managers are -- I guess paralyzed is too harsh -- very indecisive because so many things matter when making decisions that may extend out for six to 12 months," says a reader who wishes to remain anonymous. "It's almost to the point of affecting the overall business because we're putting things off. I myself don't want to start new projects because I don't know if I'll have the ability to complete them after reorganization."

Government Spending
The government, on both the federal and local levels, operates by a different set of rules than do capitalist enterprises. One reader, who asked to remain anonymous, says: "I work for the U.S. government, and we haven't seen these types of problems [budget cuts and layoffs]."

Local government IT teams aren't so lucky, at least according to Jim Sutton, who works for a county government that operates with "a manager, clerical support person, PC/server/phone system support person and a programmer." The programmer was hired most recently, so if layoffs happen he'll likely be targeted, Sutton explains. But the value this group provides does offer some sanctuary.

"Other departments have laid off people, but I think they realize that to do as much or more with fewer people, automation will play a large part, and that can't happen if they cut IT staff," says Sutton. "All projects except some public-safety-related projects have been stopped, including our annual PC replacement cycle. Fortunately, with virtualization, if we need a new server for something, we don't have to buy new hardware."