Penny smart and dollar stupid: IT jobs slashed in US, UK, Europe to cut costs – just when we need staff the most

More than a third of businesses in France, Germany, the UK, and the US have laid off or furloughed IT staff based on coronavirus cost concerns, says private equity biz, and Scottish satellite slingers, Leonne International. A survey of 1,116 senior business decision makers in Europe and the US and found that 37 per cent had …

[rcxb]

"such a high proportion of companies are allowing employees to share confidential company data on personal devices, using outdated apps as well as knowingly operating in breach of GDPR rules."

For companies that weren't prepared (most of them?) it's a matter of doing ANYTHING necessary to continue business operations immediately, or else having to close up shop entirely and everyone finding new jobs. Given that, risking a GDPR fine doesn't seem a bad choice...

Of course they've put themselves in this position by not having working DR plans, and not having enough IT staff to do things properly, etc. But right now, companies everywhere are breaking all kinds of rules to varying degrees, and just hoping their luck holds out and the fallout won't be completely devestating. Look no further than COURTS using Zoom...

[Doctor Syntax]

I agree risking a GDPR fine isn't going to enter into their calculations now and it probably didn't before. There's always budget to pay the fine even if there isn't budget to comply in the first place.

But being in a situation where their operations have become more complex doesn't make sense to cut down. The probably explanation is that manglements don't realise the added complexity and vulnerabilities they've taken on. They're not prepared for the budget to pay to support it - there may come a day when things go so badly wrong there won't be a budget bigi enough to fix it

[Roland6]

>Of course they've put themselves in this position by not having working DR plans

Did any of the DR plans you drew up or contributed to contain any consideration of the circumstances we are currently in; I suspect not, as I know despite all my years of experience, none of my Business Continuity plans covered the current situation.

>and not having enough IT staff to do things properly

Actually, it more of not having the right IT staff. One client the IT staff wanted to buy a load of laptops etc.; I visited their offices and got them to empty out their cupboards - 5 days later all those laptops (some dating from 2012) were running Windows 10 etc. and in the hands of employees pleased to be able to work from home.

> Look no further than COURTS using Zoom...

It works and provides good enough security for public proceedings.

Obviously, we can expect some big product enhancements in September, embedding some of the key learnings from the current mass usage of video calling/meeting/conferencing systems. So I would not be surprised if some user groups move away from Zoom, Teams etc. to more appropriate platforms.

[rcxb]

Did any of the DR plans you drew up or contributed to contain any consideration of the circumstances we are currently in; I suspect not, as I know despite all my years of experience, none of my Business Continuity plans covered the current situation.

Our DR plans most certainly considered several scenarios where nobody would be allowed into the offices and everyone would have to work remotely for extended periods. The current circumstances are far less devastating than most DR scenarios.

[Roland6]

>Our DR plans most certainly considered several scenarios where nobody would be allowed into the offices and everyone would have to work remotely for extended periods.

Bet they didn't take into account social distancing, unavailability of parts, spares etc.

Not saying the plans didn't help, just that having had to restore Internet connectivity for a client (trunk fibre lines out of the town were servered - took BT/OR 3 weeks to fix), I did find the plans only went so far before it was "get your thinking hats on" - what do we have that we can use to restore some form of connectivity so people can resume working tomorrow morning and continue to work until such time that BT are able to restore normal service...

[Anonymous Coward]

RE: not having enough IT staff to do things properly

I did follow up to see if it was an IT problem, but it certainly was a similar situation.

One of the major US TV networks, CBS, had a strange evening news show last week. I tuned in a couple of minutes late and wondered how they had gotten on to the first commercial break already and that it seemed to be a lot of commercials. Then the news started but it seemed a bit different. Finally I noticed that I was watching CBSN their streaming service on my local CBS OTA channel.

Later I was able to Google that there had been a technical issue in the main studio that they couldn't fix quickly as they were operating with reduced staff due to COVID-19.

[ovation1357]

The survey also found 44 per cent of companies know that staff members are using outdated versions of Zoom

Not for much longer... After 30th May Zoom is switching to AES256-GCM following criticism of their use of ECB mode (see https://blog.filippo.io/the-ecb-penguin/ )...

It sounds like users will be forced to upgrade or lose service.

...have laid off or furloughed IT staff based on coronavirus cost concerns

I do question whether it's fair to count furloughed staff in these figures though - this implies that it is intended for them to return to work once it is safe to do so and isn't really comparable to laying off those people.

[John Brown (no body)]

..and exactly which IT staff have been furloughed or let go? Juniors, apprentices and some hell-desk staff most likely will be the majority of the number.

[BebopWeBop]

Possibly they do, possibly they dont intend them to return, but I would bet a number of companies are using it as an opportunity to stage layoffs.

[DavCrav]

"I do question whether it's fair to count furloughed staff in these figures though"

True, but given that the massive IT requirements are now, furloughing is as good as firing for the purposes of the article.

[Anonymous Coward]

Typical

One wonders how many have been furloughed in upper management or legal or marketing?

If years of El Reg's coverage has taught us anything, it's that IT begs for scraps from the corporate table and given the choice between cutting IT costs and improving IT capabilities the CEO's answer is all too predictable.

The unfurloughed lawyers will argue for delays in requirements due to COVID-19, the unfurloughed marketeers will downplay any security problems and condemn hackers who would do this during the crisis, and the unfurloughed executives will self quarantine on their estates. Cest la vie.

[Anonymous Coward]

Re: Typical

One wonders how many have been furloughed in upper management or legal or marketing?

I'm the IT Manager in a law firm. Our work is in property, wills & probate or court work. The property market is fucked since the government has told people not to move unless in exceptional circumstances or if the property they are moving into is empty, and people can't go out and view houses so no new cases there.

Doing wills for people are keeping staff somewhat busy since we're offering a will for a hundred quid, and court work is... well, the courts are closed. Draw your own conclusions.

About two thirds of the legal staff are furloughed, and 100% of the marketing bods are furloughed. IT is considered essential given the number of people only working due to IT. I'm a bit envious and mildly jealous of those people getting paid 80% of their wages to sit around at home doing nothing given that I've been covering 3 departments work for the last 6 weeks while also doing some project work to automate their jobs to the point that I can get away with reading and commenting on El Reg during work time.

[IGotOut]

tldr

Security company does report saying not enough being spent on security.

Meanwhile most of the business world tries to work out if their business will survive another month.

[Anonymous Coward]

Re: tldr

Saving pennies and losing pounds.

Local store. Instead of having regular cash deliveries to a cash machine to keep the stored cash down but at a higher wage and delivery cost, they just stockpile tons of it. The result? High desire and risk for criminals to attempt a theft. So they steal trucks, crash through the wall, and cause no end of damage. Don't get the cash machine though.

I guess in the long run it may have saved them money, on wages and deliveries. And who knows, perhaps the smaller cash machine would also have been ram raided? But it makes me wonder if security and prevention from the ground up (putting barriers to prevent ram raids was very possible in this case, just not used) can save a lot of money in preventing some of the attempts in the first place.

As for IT, see Zoom and them not having the right security model at the start, means it's a bit of a mess now.

[Mr Dogshit]

Re: tldr

You what mate?

[Pascal Monett]

Re: tldr

At this point in time, most stores that I can still go to have put up a sign stating that they simply don't take cash any more. How can anyone be "stockpiling" cash ?

[Peter2]

Re: tldr

I think he means the ATM. By filling it to the brim rather than keeping it stocked at 10% and then filling it every day or something, which I don't think anybody has ever done.

[Kabukiwookie]

Re: tldr

How can anyone be "stockpiling" cash ?

Banks and large corps in the US received a 5 trillion dollar bailout, while small businesses are gping tits up. Guess who'll be raking in more market share / cheap property after Corona?

[LucreLout]

Re: tldr

Security company does report saying not enough being spent on security.

Yup - classic "spend more, preferably on me" ranting.

Meanwhile most of the business world tries to work out if their business will survive another month.

Yup. Those feeding on the public sector will mostly be fine - recessions only happen in the private sector. A great many businesses will not survive the next 24 months, almost no business will survive the next 24 months with current staffing levels.

From the article:

"It beggars belief that businesses are slashing IT staff at a time when digital skills are so critical for delivering effective remote working systems," said Andy Harcup, VP at security biz Absolute Software, in a canned statement.

IT staff are expensive. There's a huge recession coming. Costs will get cut across the private sector. How does anyone realistically expect that won't result in fewer IT staff? I'm not sure he's thought through his position here, and that doesn't reflect well on his company.

[DavCrav]

Re: tldr

"How does anyone realistically expect that won't result in fewer IT staff?"

If you want your remote company to work, you need IT. It's pretty much the only workers you need in such a company. Cutting down on essential staff (rather than 'essential' staff like management) is a bad idea for the viability of your company, even in the short/medium term.

[LucreLout]

Re: tldr

If you want your remote company to work, you need IT.

You do need IT, nobody is arguing against that, the question is how much IT you need.

Do you need to spend more on InfoSec because some people now work from home? No. My bank already had everything in place to facilitate this, so there's no free lunch coming in terms of larger spend on InfoSec. We don't need more devs, hell, we don't even need more systems guys, because we've dumped dev & cert and tooling such as build servers into the cloud now for anything new, with only prod running on prem.

His entire premise is weak and ill though through, which casts real doubt about how much faith to put in his consultancy when it comes to security, where thinking things through properly is a pre-requisite.

[Roger Kynaston]

IT is like HR (should be Personnel though) in some respects

Both are essential to the operation of the organisation - it is the same for both public sector and private - but are not perceived as delivering any value so are always for the chop when any cost cutting is deemed necessary. Once day the manglement will realise this but I suspect the heat death of the universe will come first.

[Pascal Monett]

Re: IT is like HR (should be Personnel though) in some respects

HR is very different from IT. HR always has the budget it needs because HR is who the CEO calls when it is time to fire IT people.

[Jay 2]

Re: IT is like HR (should be Personnel though) in some respects

Indeed. Sweeping cuts across the board? I bet you'll never see anyone in HR let go... unless it's really bad.

[Nunyabiznes]

Re: IT is like HR (should be Personnel though) in some respects

I was part of a 40% reduction (large percentage but small number) in staff one fine day between Christmas and New Year. The VP of HR was tasked with handling all the notifications.

When she was done the Pres/CEO/Owner said "Er, by the way..."

[Anonymous Coward]

Re: IT is like HR (should be Personnel though) in some respects

> When she was done the Pres/CEO/Owner said "Er, by the way..."

Maybe next time start with HR instead.

[Nunyabiznes]

Re: IT is like HR (should be Personnel though) in some respects

He wanted a hatchet person. She was it. You always let the hatchet person off last.

[Anonymous Coward]

Re: IT is like HR (should be Personnel though) in some respects

I recall a colleague, many years ago, being handed a pile of envelopes with P45s/ redundancy notices to hand out to his staff across the organisation. He walked the corridors to hand them out personally, apologising to each person in receipt of one. The last one in the pile was his. He had decided it was nearing time to retire, anyway, but came and worked part time in my department, at a rival firm. A couple years later, our company took over his old one and the person who'd been given his old job (a previous subordinate who knew where to crawl) became our boss. We both decided it was time to go (he retired properly, and I went into consulting, subsequently getting several good contracts with other parts of the company).

[Will Godfrey]

It's not all bad.

A small engineering firm I used to work for got it exactly right. They've always kept an amount of finance invested for quick access in emergencies. About 15 years ago, they started diversifying (having been previously exclusively supporting the print industry). As a result, during this period they've kept working, as many of their newer customers are in essential services - food processing and packaging. They've only started furloughing some of the more junior engineers as other work has tailed off. One of the directors has returned to do engineering work, and the other one now maintains all the office paperwork - the secretary had to be furloughed immediately as she is high vulnerability.

[Pascal Monett]

Re: It's not all bad.

I'm guessing the secretary would disagree with your point of view.

[DavCrav]

Re: It's not all bad.

"I'm guessing the secretary would disagree with your point of view."

She is probably thinking 'I'm vulnerable to the virus, so I have to stay home, but hey, at least I'm still being paid 80% [maybe 100% if topped up] of salary'. So not all bad.

[Will Godfrey]

Re: It's not all bad.

You'd guess wrong. She is also a personal friend, and is highly relieved. She had been considering resigning. She is over 60 with a history of respiratory issues.

[Pascal Monett]

Re: It's not all bad.

Well that wasn't clear in your original post. Obviously, she's better off at home in those conditions.

[Roland6]

Re: It's not all bad.

>the secretary had to be furloughed immediately as she is high vulnerability.

Missed a few steps in your reasoning.

You only fuloughed staff you don't need to run the reduced business.

Now you look at the staff you retained and assess whether their vulnerable/high vulnerability status prevents them from doing some or all of their normal job and what would need to be put in place to enable them to do their job...

Last month I renewed my car insurance, I spoke a very pleasant lady who, whilst we waited for the systems to process my renewal, I discovered was in a high vulnerability group, her employer had set her up to work from home...

[Anonymous Coward]

Worst case scenario

For me when i raise the worst case scenario in meetings you get treated as been negative as management think these situations will never happen as the garden is always rosy. Skimp on DR and you will end up paying a whole lot more.. a whole lot more. Long term you never save money it ends up costing you, invest to protect yourself.

[Psmo]

Re: Worst case scenario

People with Zombie Plans are starting to look pretty wise.

Avoid population centres and head north or south to freeze or burn off the virus.

Icon: Close enough

[Brewster's Angle Grinder]

Re: Worst case scenario

Out of interest, did you ever raise the potential for a global pandemic to shut down the world economy?

[hoola]

Staff Cuts

Whilst in the short term, IT staff are needed to sort out remote working and keep the lights on, unless you are in a sector that is largely immune from the impact of COVID19 then at some point the in-out costs have to be crunched.

Currently it would be safe to assume that anyone in the food and healthcare sectors are okay, but only as far back as the largest company in the supply chain. The small guys at the far end of food production will be screwed by the supermarkets at every opportunity because that is what they have always done. Some of the financial sectors along with some engineering will be okay but there is a substantial block with directors who will be shitting themselves trying to decide if they have any sort of viable business in 3 months. Furlough only goes so far and cannot be indefinite. This is BAs problem, at the moment there is absolutely no sign that air travel will return to 2019 levels so they only options they have are to make staff redundant or go bankrupt.

IT projects will be stopped because there is no money to continue the investment, that means that the IT establishment also has to be cut. The real disadvantage for the core IT "Doers" is that people forget that we exist. The better you do your job, the less attention that is paid as issues with systems and downtime are minimised. IT also tends to have a high proportion of expensive posts, skills cost money, and cutting these gives you a quick win on the balance sheet. There will always be an army of Project Managers and Business Analysts BUT these are seen by the business. They should be also in the firing line because is you are cancelling projects then you need less PMs. If you are only keeping the lights on you don't need the Business Analysts. One could also go back to the dawn of time when we used to implement large projects without an army of PMs. I suspect that the IT Techies will always end up at the forefront of this situation because we hide in the shadows and tell people what they cannot do.

[Nunyabiznes]

Re: Staff Cuts

Agree mostly, but some healthcare is already seeing cuts. Our hospital has had no more than 2 cases of COVID at any one time, but the rest of the hospital is shut down except emergency services and birth ward.

They are running out of emergency cash, and most people are working reduced hours or are completely laid off. Based on history, they will use this as a lever to cut wages when/if they do bring staff back.

[Yet Another Anonymous coward]

Re: Staff Cuts

Here on the left pond healthcare has been really hard hit.

Costs are through the roof as you try and out bid the govt for PPE and all your regular suppliers for everything have gone to black-market rates

But all your customers have gone away, no elective surgery, no scans, no regular patients.

[Anonymous Coward]

There's a light an the end of the tunnel

The plan is that cutting back the IT staff will keep the management bonus when we finally get over this current crisis.

Once everything reopens they will bring back all the sales and daily office staff and tell the IT staff that they will be rehiring in a month. Then everyone will log into the corporate email servers and start dealing with the email backlog, checking everything that's come in over the last month or two ... spam, malware, and viruses are currently stacking up unopened.

The light at the end of the tunnel is the explosives around that little ball of Pu239

[Dave 15]

Intelligence?

You don't expect leaders of companies to use their brains for anything harder than working out how to spend the billions they pay themselves?

Next they will be bleating about a lack of skills rather than realising they are paying so badly people decide on collecting bins, driving taxis or working abroad. If you want seriously well educated and intelligent engineers you do not get them by paying peanuts.

Of course business today is never about building for tomorrow it is only ever about reporting today as profitable so they can pay themselves another multi million bonus.

Sad really

[Dave 15]

While we are talking about GDPR etc

A while ago the EU decided to do something about cookies. Now it seems sites, including el reg, have decided to splurge a huge banner right across the page so you can't use it. I am pretty sure that is NOT what the EU intended. I am 100% sure they didn't want people to be forced to accept 'essential' cookies because in honesty any decent engineer can design a cookie free website that functions. So el reg, you bang on about others then fuck us all over with your lazy approach.

[Anonymous Coward]

Re: While we are talking about GDPR etc

“So el reg, you bang on about others then fuck us all over with your lazy approach.“

- I don’t feel “fucked over“.

- It’s not lazy, their site needs them.

- UK laws allow this.

- Why should they spend countless thousands redeveloping their perfectly functional site?

- Block unwanted cookies like the rest of us.

- Stop swearing needlessly.

[Roland6]

Is the glass half full or half empty?

For all those forloughed IT staff, being paid to not work but to 'volunteer'...

There are many Open source projects needing extra hands and minds...

[Brad16800]

Initially we were actually asked by upper management if we could just "turn IT off" during the shutdown when in fact the amount of staff support related work has gone up significantly, supporting a smaller number of staff but dealing with the difficulties of home office setups. We've had to reduce maintenance a little to handle that but security has been kept untouched.

Fortunately (and i'd guess we're in the lucky minority) our company has since turned around and said they are increasing IT spending so that we will be in a better position coming out of this. Not that we're all popping the champagne as it's going in to projects but it is keeping us busy (and employed)

[Anonymous Coward]

Smoke and mirrors.

They are releasing high cost staff.

Then when they rehire it will be in lower cost centers (India, cough cough).

Or they will say that they are going to move to the cloud and thus need less staff.

Some companies like Cloudera are using COVID-19 as an excuse to cut staff with a hope that they will one day become profitable. Heck losing 300mil a year is gap they can close if they cut staff and raise prices.

And they are not alone.

[Medixstiff]

Re: Smoke and mirrors.

"Then when they rehire it will be in lower cost centers (India, cough cough)."

Maybe look at how TOLL group is faring this year after they outsourced thier IT to India.